Upload
surendra-vinayakam
View
285
Download
2
Embed Size (px)
Citation preview
Annual Report
2008 - 09
NMDC Limited
NMDC Limited
1
NMDC Limited
C O N T E N T S
Directors’ Report 3
Auditors’ Report 42
Comments of C&AG 47
Balance Sheet 52
Profit & Loss Account 53
Schedules 54
Cash Flow Statement 90
Annual Report of Subsidiary Companies
� J&K Mineral Development Corporation Limited 93
� NMDC-CMDC Limited 117
� NMDC SARL 133
� Nam - India Minerals Development Corporation (Pty) Limited 137
NMDC Limited
2
NMDC Limited
3
Dear Members,
On behalf of the Board of Directors, I take pleasurein presenting the 51st Annual Report on theperformance of your Company, together with theAudit Report and Audited Accounts, for the yearended 31 March 2009 and the Report thereon bythe Comptroller and Auditor General of India.
1.0 RECORD PERFORMANCE
Despite economic recession during the 2nd half ofthe year under review, your Company's financialperformance during the year has surpassed itsprevious record achievements. In brief, they aresummarized as under:
� Turnover reached a new high of Rs. 7564crore breaking the previous year's record ofRs. 5711 crore.
� Profit before tax shot up to Rs. 6648 crore, 34%higher than the previous year high of Rs. 4947crore and the profit after tax increased toRs. 4372 crore, 34 % higher than the previousyear high of Rs. 3251 crore.
� Networth increased to Rs. 11615 crore as on31-03-2009, 41% higher than Rs 8265 croreof the corresponding date of the previous year.
� Interim dividend totaling 103% was paid.
� As an MOU signing PSE with the Governmentof India, your Company's performance duringthe year qualifies for Excellent rating.
� Supply of Iron Ore to domestic industriesrecorded 225.98 lakh tonnes as against theprevious year's supply of 244.06 lakh tonnes,recording a decrease of 7.41%. Total export ofIron Ore during the year was 38.74 lakh tonnesagainst 37.78 lakh tonnes in the previous year,an increase of 2.54%.
� During the year, 7 Units of Wind ElectricityGenerators having a capacity of 1.5 MW eachhave been commissioned and generated65.46 lakh KWH of power. The power is beingtransmitted to the grid of Karnataka PowerTransmission Corporation Limited.
Directors’ Report for the year 2008-09I am pleased to present in brief the physical andfinancial performance of your Company during theyear under review:
2.0 PHYSICAL PERFORMANCE
2.1 Production
Product Achievement Percentagechange
2007-08 2008-09
Iron Ore(lakh tonnes) 298.16 285.15 (-) 4.36
Note:
a. As a result of stoppage of Diamond miningactivities at Panna from 22nd August 2005 asper the directive of Madhya Pradesh PollutionControl Board and suspension of plantoperation as directed by the CentralEmpowered Committee constituted by theHon'ble Supreme Court of India from 19 April2006, there is no production of diamondsduring the year.
b. Silica sand mining operations are suspendedsince November, 2007 due to commercialreasons and the Lalapur Silica sand minesare kept under care and maintenance.(Previous year production was 0.03 lakhtones).
2.2 Sales of Iron Ore
The economic recession during the 2nd half of theyear impacted the sale of iron ore. However, timelymeasures taken by your company could reduce theseverity of the impact of the same.
(in lakh tonnes)
Product Achievement Percentagechange
2007-08 2008-09
Domestic 244.06 225.98 (-) 7.41
Export throughMMTC 37.78 38.74 2.54
NMDC Limited
4
2.3 Other Sales
Products Achievement
2007-08 2008-09
a) Diamond
Sales (carats) 2631.51 –
Value (Rs. in crore) 3.75 –
b) Silica Sand
Sales (lakh tonnes) 0.02 0.02
Value (Rs. in crore) 0.09 0.08
c) Wind Power
Sales (lakh KWs) – 65.46
Value (Rs in crore) – 2.22
3.0 FINANCIAL PERFORMANCE
3.1 Operating Results
Parameter Achievement Percentagechange
2007-08 2008-09
Profit BeforeTax(Rs. in crore) 4,947.47 6648.23 34.38
Net Worth(Rs. in crore) 8,265.10 11614.71 40.53
Book valueper share(Rs.) 20.85 29.30 40.53
Earnings perShare (Rs.) 8.20 11.03 34.51
Note:
The Company split the face value of the shares toRe. 1/- per share on 21st Apri l 2008 and theshareholders were allotted two bonus shares forevery share held on 22-05-2008. Accordingly, thebook value and EPS for the year 2007-08 have beenreworked.
3.2 Profit & Dividend
During the year under report, your Company earneda profit (before tax) of Rs. 6648 crore, an all-timerecord, on a turnover of Rs. 7564 crore in
comparison with those of the previous year'sachievement of Rs. 4947 crore on Rs.5711 crore.
Your Company has paid an interim dividend of 103%to the shareholders for the year under reportamounting to Rs. 408.36 crores. In respect of theholding of Government of India of 98.38% in theequity of your Company, a sum of Rs. 401.77 crorewas paid towards interim dividend. The Board hasrecommended subject to shareholders approval,payment of final dividend of Rs. 467.84 crores.(Total dividend aggregating Rs. 876.20 crores).
4.0 DEPOSITS
The Company has not accepted any Fixed Depositsduring the year under review.
5.0 NEW PROJECTS & BUSINESSDIVERSIFICATIONS
5.1 Projects under construction
5.1.1 Bailadila deposit-11/B
To achieve targeted production of 50 MTPA by2014-15 the construction of Deposit 11B mine atexpanded capacity of 7.0 million tonnes of ROM perannum has been taken on priority. The estimatedcapital expenditure towards this is Rs. 607 crores.The expected date of completion is March 2010.
5.1.2 Uniflow System at Bacheli
The work is in progress and is estimated to becompleted by 2009-10.
5.1.3 Fourth Line in Screening Plant-II ofBailadila-14/11C
To meet increasing production demands up to7 MTPA and considering the lower lump recoveriesanticipated in the future years this scheme of 4thproduction line in addition to the existing three lineshas been envisaged and work was awarded on02.11.2006.. This scheme has been completed.
5.1.4 Slime-based Pig Iron Plant at Jagdalpur
Matter related to setting of slime based Pig IronPlant is kept under abeyance.
5.1.5 Merger of Sponge Iron India Limited
In pursuance of order of Ministry of Corporate Affairs(MCA) Government of India dated 17-04-2009, the
NMDC Limited
5
Company is required to convene a meeting of itsEquity Shareholders and Unsecured Creditors on22.05.2009 in order to approve the Scheme ofAmalgamation of Merger of SIIL into NMDC. In themeetings held on 22nd May, 2009, the UnsecuredCreditors and Equity shareholders have approvedthe Scheme of amalgamation between SIIL andNMDC. Confirmation Petition has been filed withMinistry of Corporate Affairs (MCA), Government ofIndia. Upon merger, the Company is contemplatingto expand the capacity of the plant at Paloncha, A.P.
5.1.6 Kumaraswamy Iron Ore Project
To compensate the depleting reserve of Donimalaiiron mine and augmenting production capacitytowards achieving the target of 50 MTPA theconstruction of Kumaraswami mine with capacity of7.0 MTPA was envisaged. Mecon is appointed asEPCM consultant. The entire project has beenplanned to be executed in 6 packages. Tenderingactivities of the packages are in progress.
5.1.7 Windmill in Karnataka
9.0 MW Wind Power Project has beencommissioned on 30th September 2008 andconnected to KPTCL grid.1.5 MW Wind Energy Farmhas been commissioned on 31st March 2009 andconnected to KPTCL grid.
5.1.8 Low Silica Limestone Project, Arki (HP)
NMDC is having lease of Arki Limestone mine inthe state of Himachal Pradesh. This deposit wasearmarked for use of metallurgical limestone bySteel plants of SAIL. Because of adverse logisticconditions, SAIL could not lift the material from ArkiLimestone Mine. Afterwards State Govt. allowed useof limestone by the local Ambuja cement plant inthe State, till tie up is made for sale of material toSAIL. Presently, formation of a JV with SAIL foroperationalisation the mine is under finalization.
5.1.9 Panthal Magnesite Project
NMDC has formed a Joint Venture Company withJ&K Minerals Limited in the year 1989 to exploreand exploit Panthal magnesite mine to producedead burnt magnesite. The JV is named as J&KMineral Development Corporation Ltd and is asubsidiary of NMDC. Because of depressed market
scenario, the operation of magnesite mine couldnot be started till 2008. In view of the presentmarket of dead burn magnesite (DBM), the Boardof NMDC has decided to revive the Panthalmagnesite project, by constructing a 30,000 tonnesper annum DBM Plant. Engagement of EPCMConsultant is in progress, detailed project reporthas been prepared by MECON and is ready for duediligence process.
5.2 Joint Ventures
5.2.1 Bailadila Iron Ore Deposit-13
Your Company has formed a Joint VentureCompany NMDC-CMDC Ltd with CMDC to developDeposit-13 as a stand alone project of 10 MTPA.Necessary clearances to execute the project areawaited.
5.2.2 Bailadila Deposit-4
It is envisaged to develop deposit 4 as JV withCMDC.
5.2.3 Rail Link between Rowghat andJagdalpur
A new BG Rail link is being planned from DalliRajahara to Rowghat over a distance of 95 km inthe first phase primarily for the mines of SAIL. It isalso being planned to extend the rail link, in thesecond phase, from Rowghat to Jagdalpur over adistance of 140 km. As this rail link will provideadditional route for evacuation from the Bailadilamines, your Company has become part of the JointVenture for the project along with the IndianRailways, Government of Chhattisgarh and SAIL bysigning an MoU amongst the parties.
5.2.4 Coal ventures abroad-International CoalVentures (P) Ltd (ICVL)
The Joint Venture Agreement has been signed toincorporate the International Coal Ventures limited(ICVL). The new Company has already beenincorporated on 20-05-2009 as a private limitedCompany. The acquisition of the coal properties intarget countries such as Australia, Mozambique,Canada, Indonesia and USA are pursued with thehelp of the empanelled Merchant Bankers/Investment Bankers, Technical Consultants andLegal Consultants.
NMDC Limited
6
5.3 Foreign venture
5.3.1 Tanzania
In Tanzania your Company is pursuing Goldexploration in Bulayang Ombe & Siga Hills. Theexploration has been completed under thesupervision of CSA consultant. The consultant hassubmitted the exploration report suggesting NMDCto carry out further exploration work to assess theGold reserves. Retention licence has been obtainedfor 5 years over the PL areas. To facilitate grant ofmining lease, M/s. MTL Consult ing Company,Tanzania has been awarded the work to prepare EIAReport.
5.3.2 Tunisia
Your Company in consortium with M/s. RashtriyaChemicals and Fert i l izers Ltd (RCF) as leadmember, KRIBHCO and GSFC has participated fora Rock phosphate deposit in Tunisia.
5.4 Leases for minerals
5.4.1 Iron Ore
5.4.1.1 In respect of Bailadila-1 & 3
Your Company has filed Writ Petition before theHon'ble High Court of Delhi against allotment of PLin favour of Tata Steel & ESSAR respectively. TheWrit Petitions are pending before the Hon'ble HighCourt of New Delhi.
5.4.1.2 The PLs of your Company being pursuedin Chhattisgarh are - South of Bailadila Dep-14,East of Bailadila-1, North of Deposit 1, Eklama Ironore complex Kwardha.
5.4.1.3 In Jharkhand your Company is pursuingML application for Ghatkuri Iron Ore Deposit forexploitation in JV with State Government. YourCompany has filed a Writ Appeal in the SupremeCourt against the directions of the Court Order,which directed the State Govt. to consider theapplication of private parties for allotment of MiningLease. The Writ Appeal is pending before theHon'ble Supreme Court of India, New Delhi. Inaddition, your Company is also pursuing for MLs forBudhaburu, Ankua RF, Jhilingburu and PLs & MLsfor Sasangada and Barajamda.
5.4.1.4 In Karnataka, your Company is pursuingfor ML for Ramandurg, Kumaraswamy (contiguousto ML No. 1111), Kudre Kanive Kaval, Jaisingpur,Bhavihal l i , Narayanpura, Vyasanakere &Hanumanhalli, Sy. No. 278 of Kenkere, Ramthal &Alihole and Bababudangiri.
5.4.1.5 In Orissa your Company is pursuing forML for Mankadnacha.
5.4.2 Gold
5.4.2.1 In Jharkahnd your Company is pursuingML/PL for Pahardia - Rungikocha and Parasi-Kutachauli-Khotadih.
5.4.3 Diamond
5.4.3.1 In Andhra Pradesh, your Company ispursuing for ML for Anumpall i , Venkatampall i ,Thimmasamudram, Wajrakarur, Chigicherla andPLs of Kalyandurg.
5.4.3.2 In Madhya Pradesh, your Company hasbeen granted 2 PLs over Baghain block and Sarangblock. Your Company is also pursuing for other 3blocks viz. Rampura Mutwa, Karmatia andLakshmipur blocks.
5.4.4 Beach Sands
Your Company has been granted PL in Ganjam.First Phase explorat ion has been completed.However, results are not so promising and it hasbeen decided to relinquish the area.
5.4.5 Platinum Group of elements
5.4.5.1 In Uttar Pradesh , your Company ispursuing for PL for Tsganan area, Dangli andDangli RF.
5.4.5.2 In Karnataka your Company is pursuingfor PLs for Hanumalapura Rangayyagiri StateForest, Basavanahalli Masanikere area.
5.4.6 Coal
5.4.6.1 In Chhattisgarh , your Company hasapplied for 8 Coal Blocks viz. West of Bei j inPhatepur, Girari , Gitkunwari, Ongaon-Potia,Batatikolga Central, Puta Parogia & Karline andTara Coal Block in Raigarh and Sarguja District.
NMDC Limited
7
5.4.6.2 Your Company has also applied for 7 CoalBlocks in Jharkhand viz. Pachwara South, TokisudSouth, Babupara, Jhirki West OC, Pushro, Duni andBarabatpur.
5.4.6.3 In Madhya Pradesh, your Company wasgranted 2 Coal Blocks viz. Shahapur East andShahpur West in Sahdol Distr ict. The Coalexplorat ion in the above 2 Blocks has beencompleted by MECL (Nagpur) and GeologicalReport is under preparation for development andexploitation.
5.4.6.4 In Orissa, your Company has applied for1 Coal Block i.e. Kupano- Labo.
5.4.7 Bauxite
In Jharkahand your Company is pursuing for PL/ML for Mahaudih village, Kujam village, Utani, Akasi& Putrang villages, Kotih village, Kujam & Chirodihvillages in Gumla District.
5.5 Business Diversification
Your Company has undertaken various businessdiversification initiatives as under:
5.5.1 3.0 MTPA Integrated Steel Plant inChhattisgarh
� In principle' decision is taken for setting up of3.0 MT Integrated Steel Plant at Nagarnar,near Jagdalpur, Chhattisgarh where NMDCalready has 995 acres of land in i tspossession.
� Foundation stone for the plant has been jointlylaid on 03.09.2008 at the hands of honorableShri Ram Vilas Paswan, Union Minister forChemicals, Ferti l izers and Steel and ShriRaman Singh, Chief Minister of Chhattisgarh.
� MOUs have been signed betweenChhattisgarh Government and NMDC as wellas between NMDC and CMDC on 03.09.2008.
� Industrial Entrepreneurship Memorandumacknowledgement has been received and RailTransport clearance has also been received.
� TEFR (Techno-Economic Feasibility Report)has been finalized and the same is under-going "due diligence".
� Other pre-project activit ies l ike obtainingenvironmental clearance, appointment ofconsultant on EPCM (EngineeringProcurement & Construction Management)basis, Railway Consultant are in progress.
� Applications have already been submitted foracquisition of additional land of about 778acres in two phases, for supply of powerrequired during construction & operation, andwater required during construction & operationof plant to the concerned State authorities.
5.5.2 2.0 MTPA Pellet Plant at Bacheli
The main objective of this project is to prolong thelife of Tailing Dam at Bacheli Complex. TEFR hasbeen prepared. Other act ivi t ies for obtainingstatutory approvals and environment clearance arein progress. The project is scheduled to becompleted by 2011-12.
5.5.3 1.2 MTPA Pellet Plant at Donimalai
The main objective of this project is to prolong thelife of Tailing Dam at Donimalai. TEFR has beenprepared. Other activities for obtaining statutoryapprovals and environment clearance are inprogress. The project is scheduled to be completedby 2011-12.
5.5.4 MOU has been signed with the WestBengal Mineral Development & Trading CorporationLimited for exploring coal blocks allotted to them.-No further development.
5.6 New Initiatives
5.6.1 Underground Coal Gasification (UCG)
To harness energy from deep un-mineable coalseams in an environmentally clean way and viewingthe Underground Coal Gasification (UCG) potentialin India, your Company has entered into aunderstanding with Clean Coal Ltd. (CCL) of UK tojointly develop resources using UCG.
5.6.2 SOLAR POWER PLANT
Your Company is venturing to develop solar powerdevelopment projects in India along with thetechnology providers in joint venture.
NMDC Limited
8
5.6.3 A Demonstration beneficiation plant forBHJ is being considered at Donimalai (3 lakh TPA).
5.7 Strategic alliances
5.7.1 Your Company signed MOU with SpiceMetals and Minerals on Strategic partnership forplanning, acquisit ion, development andmanagement of metal & mineral projects outsideIndia.
5.7.2 Your Company signed MOU with Rio TintoIndia Private Limited to co- operate in investigatingmutual ly advantageous potential investmentopportunit ies primari ly for iron ore and othercommodities both within India and globally.
5.7.3 Moving globally your Company has alsojoined hands with Kopano Ke Matla InvestmentCompany (Pty) in the Republic of South Africa forexploring and exploiting the mineral resources inSouth Africa.
6.0 R&D ACTIVITIES
Details as required under the Company's Rules1988 (Disclosure of particulars in the report ofBoard of Directors) are at Annexure-I.
7.0 SUBSIDIARY COMPANIES
7.1 J&K Mineral Development CorporationLtd (JKMDC)
The annual report of the subsidiary is annexed.
7.2 NMDC-CMDC Ltd (NCL)
The annual report of the subsidiary is annexed.
7.3 NMDC SARL, Madagascar
The annual report of the subsidiary is annexed.
7.4 NAM - India MDC (Pty) Ltd, Namibia
The annual report of the subsidiary is annexed.
7.5 Statement pursuant to section 212 of theCompanies Act, 1956, pertaining to the SubsidiaryCompanies is at Annexure-II.
8.0 ENVIRONMENT MANAGEMENT:
Your Company prompted to design, develop,document and implement Environmental
Management Systems in l ine with ISO 14001Environmental Management System standards at allits Iron Ore and Diamond production projects, withthe aim of strengthening and achieving continuousimprovements in environmental performance.
� The four major production projects, BailadilaDep-14/11C, Dep-5, Donimalai and DiamondProject have been accredited with ISO 14001-2004 EMS by M/s DNV, Hyderabad. The EMScerti f ication for BIOP Dep-5, 14/11C andDonimalai Projects were issued on 4.12.2008and were valid up to 2011.
� The Corporate approach to environmentalmanagement seeks continuous improvementin performance by taking account of evolvingscienti f ic knowledge and communityexpectation.
� Environmental monitoring studies at all theproduction projects have been successfullycompleted for the year 2008-09 by the externalapproved agencies and also by the respectiveState Pollution Control Board authorities. Thestudies indicate that all the parameters at allthe production projects are well with in theprescribed norms.
9.0 SAFETY
Your Company accords more priority attention tosafety aspects as i t does to Production andProductivity. Pit Safety Committee meetings wereregularly conducted in every mine and safetyparameters strictly monitored. Tripartite SafetyCommittee Meeting were held at Mine Level andCorporate Level with officials from the DirectorateGeneral of Mines Safety, representatives of TradeUnions & management of the corporation.
Mandays lost on account of accidents were 6806during the year under report as against 13093during the previous year.
Injury frequency rate was 1.50 during the year underreport as against 2.69 during the previous year.
10.0 ISO CERTIFICATION
Your Company, having obtained ISO 9001-2000Certification for BIOM Kirandul Complex, BIOMBacheli Complex, DIOM Donimalai, and R & D
NMDC Limited
9
Centre, second surveil lance Audit for KirandulComplex and Bacheli complex, first surveillanceaudit for Donimalai and re-certification audit forR&D Centre were conducted successfully duringthe year under review.
ISO - 9000 Certification:
Your Company is in the process of acquir ingOHSAS 18001:2007 Cert i f icat ion for i tsoccupational Safety and Health ManagementRegular internal quality audits and managementreview meetings were carried out for effectiveimplementation of quality management system.Survei l lance and re-cert i f icat ion audits weresuccessful conducted for Continuation of ISO9001 : 2000 Certification in Bailadila Iron Ore Mine,Kirandul Complex, Bailadila Iron Ore Mine, BacheliComplex, Donimalai Iron Ore Mine , Donimalai andR& D, Centre Hyderabad during the year underreview.
11.0 IMPLEMENTATION OF OFFICIALLANGUAGE POLICY
During the year 2008-09 the Company continuedits efforts for the progressive use of Off iciallanguage in all its production Units and Head officeas well as in other units. Successful efforts weremade to use Official language in administrative aswell as in technical fields. Incentive Scheme atCentral and Regional level was implemented andsuitable prizes were awarded to the el igibleemployees.
Training in Hindi and Hindi stenography wasimparted to the employees. Hindi -Workshops werealso conducted for the officers and employeeshaving working knowledge of Hindi.
Various programmes such as "Hindi Divas,Rajbhasha Pakhwadas, Rajbhasha Maah" , Districtlevel competitions in Hindi etc were organizedduring the year to bring awareness among theemployees and their family members and alsoamong the employees of other offices situated inand around Head Office and various productionUnits.
Rajbhasha Technical /Professional Seminars inHindi were organized during the year at Head Office
as well as in Production Units. RajbhashaSouvenir and technical Seminar books werealso published. Apart from these publications-Hindi House Journals viz. NMDC Patrika publishedin bi- l ingual at head off ice level and Bailasamachar, Bacheli Samachar, Hira Samachar -monthly Hindi bulletins and Doni- samachar-tri-lingual monthly bulletin are published atproduction unit level. In addition to these "KhanijBharati" a l i terary Hindi magazine was alsopublished in Hindi.
Your Company's efforts in the implementation of theOfficial language policy found recognition in thefollowing coveted awards were received during theyear.
1 NMDC was awarded the first prize ofGovernment of India's Indira GandhiRajbhasha shield for excellent implementationof the Official Language policy and progressiveuse of Hindi amongst the PSUs of Region 'C'for the year 2006-07. Sri Rana Som CMD,NMDC Ltd received the shield from HerExcellency President of India Mrs. PrathibhaDevi Singh Patil at a function held at VignanBhawan, New Delhi on Hindi divas -14thSeptember 2008.
2 NMDC was awarded Steel Ministry'sRajbhasha shield for excellent implementationof the Official Language policy and progressiveuse of Hindi amongst the PSUs of Region 'C'for the year 2007-08. Sri V.K. Sharma,Director(commercial), NMDC Ltd received theshield from Honorable Minister forChemical,Fertilisers & Steel, Sri Ram VilasPaswan at a function held at Goa on 10thFebruary, 2009.
3. NMDC Ltd was also awarded Rajbhashashield - 1st prize for the year 2007-08 of TownOfficial Language implementation committee(undertakings) Hyderabad, Secunderabad, forexcel lent implementation of the Off icialLanguage policy amongst the PSUs situatedin twin cities, Sri Vijay kumar, AGM (Officiallanguage) NMDC Ltd received the shield at afunction held at Rural Electr i f icat ionCorporation Limited, Hyderabad on 20thNovember 2008.
NMDC Limited
10
12.0 MANPOWER
12.1 Employee-Employer relations
The overal l industr ial relat ions situation waspeaceful and cordial during the year. There was nostr ike or lock out affect ing the production/productivity.
12.2 Scheduled Castes & Scheduled Tribes
Seventy Nine persons belonging to ScheduledCastes and 98 persons belonging to ScheduledTribes were appointed during the year 2009 against432 posts filled in by direct recruitment.
12.3 Strength of SCs & STs as on 31 Mar 2009
1. Total number of employees = 5652
2. Scheduled Castes amongst them = 1018
3. Scheduled Tribes amongst them = 1229
4. Total SCs and STs = 2178
12.4 Physically challenged
Thirty five physically challenged persons were onrolls of the Company as on 31 March 2009. Underspecial drive for recruitment of persons withdisabilities, offers of appointment have been issuedto 10 persons with disabilities.
12.5 Particulars of employees drawing Rs.2lakh per month or Rs.24 lakh per annumunder Section 217 (2-A): NIL.
12.6 Staff Welfare activities - Education,health and township facilities. Workers' Participationin Management Scheme has been functioningsatisfactorily and its working is closely monitored.Inter Project tournaments, both indoor andoutdoor games, cultural programmes etc wereheld in different projects during the year underreview.
13.0 HUMAN RESOURCES DEVELOPMENT
Your Company has taken various HRD initiativesduring the year under report. 71.2% of theemployees were covered in various training events.
HRD index, i.e. training mandays/working mandaysachieved for all the employees during the year is1.06 against the target of 0.98.
13.1 In-Company Training Programmes
Your Company conducted 26 in-company trainingprogrammes covering 633 employees during theperiod under review. The areas covered includeAdvanced Maintenance Practices, Reliabi l i tyCentered Maintenance, AUTO CAD LY 2007, GeneralManagement Programme, ManagementDevelopment Programme, Training and Coaching,Career Development Programme (EDP) for JuniorOff icers, Communications Ski l ls, PygmalionManager, Discover the Power within, PerformanceEnhancement through NLP, ManagerialIntrospection, Developing Executive Secretaries,Reservation Policy for SC/ST/OBC and planning forpost Retirement Life etc.
13.2 External Training Programmes
Your Company nominated 342 executives to 113External Training Programmes during the year underreport.
13.3 Foreign Training Programmes
Your Company deputed 29 Executives toattend training /seminars/conferences and studytours abroad in 8 events during the year underreport.
13.4 Executive Trainees
Your Company recruited 15 Executive trainees(Mining, Mechanical, Electr ical and MineralProcessing) during the year.
14.0 CONSULTANCY
Your Company has gained expert ise ininvestigation, planning, construction, operationand maintenance of opencast mines over aperiod of more than five decades and takes upconsultancy work in al l areas of miningincluding design of f low-sheet, mine planningreport, feasibility report, R&D works, etc.
NMDC Limited
11
15.0 VIGILANCE
Your Company's Vigilance Department certifiedto confirm to the Quality Management Systemsand the second mandatory survei l lance auditwas completed in October 2008. Forincreasing transparency, Vigilance Department hasprovided online facility in the Company's website forlodging of complaints and submission of AnnualProperty Returns. Your Company's Vigi lanceDepartment is continuing its efforts for systemimprovements and procedures to bring more andmore transparency. Your Company's VigilanceDepartment conducted various trainingprogrammes, interactive sessions for Vigilanceawareness among the employees.
16.0 DIRECTORS' RESPONSIBILITYSTATEMENT
Pursuant to the requirement under section 217(2AA)of the Companies Act, 1956, with respect toDirectors' Responsibility Statement, it is herebyconfirmed that -
i) In the preparation of the accounts for thefinancial year ending 31st March 2009, theapplicable accounting standards have beenfollowed along with proper explanation relatingto material departures;
ii) The Directors have selected such accountingpolicies and applied them consistently andmade judgements and estimates that werereasonable and prudent so as to give a trueand fair view of the state of affairs of thecompany at the end of the financial year andof the profit or loss of the company for the yearunder report;
iii) The Directors have taken proper and sufficientcare for the maintenance of adequateaccounting records in accordance with theprovisions of the Companies Act, 1956, forsafeguarding the assets of the company andfor preventing and detecting fraud and otherirregularities.
iv) It is also confirmed that there are no materialchanges between Balance Sheet date and the
date of Directors' Report which have bearingon the operations or on the nature of businesscarried on by the Company as well as on thesubsidiary companies.
17.0 DIRECTORS
During the year under report, the following wereappointed as Additional Directors on the Board ofthe Company pursuant to the orders of Ministry ofSteel (MoS), Government of India:
Sl.No. Name Appointed on
1 Shri S. Venkatesan,Director (Production) 01.08.08
2 Shri N.K. Nanda,Director (Technical) 01.12.08
The following ceased to be Directors on the Boardof the Company upon their superannuation /completion of their tenure:
Sl.No. Name w.e.f.
1 Shri V.K. Jain,Director (Production) 31.07.2008
2 Dr. Uddesh Kohli 24.10.2008
3 Shri Y.K. Sharma 24.10.2008
4 Shri RG James Kuttickattu 24.10.2008
5 Ms. M. Prabhavathi 24.10.2008
6 Shri P.S. Upadhyaya,Director (Technical) 30.11.2008
18.0 AUDIT
On the advice of the Comptrol ler and AuditorGeneral of India, New Delhi, your Company
NMDC Limited
12
appointed the following firms of Chartered Accountants as Statutory Auditors of your Company for the year2008-09:
Sl No. Name & address of Auditors Units to be covered
1. M/s. Ramamoorthy (N) & Co., Head Office and R&D Centre;4-1-1229, Gulshan Manzil, Boggulakunta, ConsolidationAbids, Hyderabad-500 001.
2. M/s. Sreeramamoorthy & Co. Bailadila Dep-14/11C,D No. 47-9-39/173C, Bailadila Dep-5,10 & 11A,Sai Sadan Apartments, Dwarakanagar, Central Workshop,Visakhapatnam-530 016 NISP, RO, Vishakapatnam
3. M/s. D.V. Sarovar & Co, Donimalai Iron Ore MineFirst Floor, D.No. 45/3 Ward No.V,Car Street, Bellary-583 101
4. M/s. Hari Gupta & Co, Purvasha, Diamond Mining Project, Panna,5A/7A, Dr. Panna Lal Road, Silica Sand Project, Lalapur.Allahabad-211 002
19.0 CORPORATE GOVERNANCE
The details on Corporate Governance are given atAnnexure-III:
20. Report on Management Discussions
A Report on Management discussions and Analysisas required in terms of Clause 49(F) of the ListingAgreement is enclosed at Annexure-IV.
21. Corporate Social Responsibility
NMDC believes that the well being of the societyat large is an essential pre-requisite for theprogress of its business and prosperity of theorganization.
With 'People' at heart of i ts phi losophy andapproach to CSR, NMDC is seeking to carryoutmeaningful work in the fields of Education, Healthcare, Sustainable Income generation andAgricultural development thus contributing to theNation Building.
EDUCATION
NMDC Shiksha Sahayog Yojana
NMDC has introduced a scholarship scheme toencourage education beyond 8th class t i l lrofessional degrees in five districts in Bastar areaof Chhatt isgarh and 8 vi l lages surroundingDonimalai.
Rs.42.80 lakhs paid for 2789 students. Likely to payRs.1 Crore in 2009-10 for 5000 scholarships.
Mid-day meal program
NMDC supports the mid-day meal program ininnovative ways. I t had partnered withAkshaya Patra, an NGO, in operating twocustomized vehicles to distr ibute mid-daymeals from a central ized kitchen to as manyas 10,000 children in schools of the surroundingareas of NMDC establ ishment at Donimalai,Karnataka.
NMDC Limited
13
Infrastructural and other support
9660 No-of school uniforms distributed.
Construction of new school buildings - 3 nos.
NMDC Education Trust
Since NMDC has taken up its initiatives on theEducation front on a wider geographical area, aneed was felt to establish 'NMDC Education Trust'to ensure that the benefits flowing from its CSRactivi t ies related to Education reach thebeneficiaries effectively and expeditiously, NMDChas created a 'Trust'. The following activities are onthe anvil.
1. Residential School at Geedam, Dantewara,Nagarnar, Kuwakonda in C.G. and Sitapurin U.P.
2. Polytechnies at Dantewara, Nagarnar, in C.G.
3. ITI at Nagarnar, in C.G.
EMPLOYMENT GENERATION
Skill Development
Skill Development workshops on Jute / Bamboo /Bell Metal / Terra kota to develop the inherent skillsof the Bastar Villagers were organized in threevillages - Nerli, Kumharras and Gamawada - 200unemployed youth benefi t ted and engagedthemselves in self employment.
Opportunities to local Manpower
4467 mandays of work generated for localmanpower through village development initiatives.2392 mandays of employment provided to localeducated unemployed youth.
Training activities such as Tailoring is on hand.
HEALTH CARE
Medical Camps
12 Medical Camps conducted in the f ields ofGeneral Medicine, ENT, Ophthalmology andDermatology providing benefit to 7931 villagersaround NMDC projects at an expenditure ofRs.69.64 lakhs.
Free Treatment
80801 Adivasis and locals were provided freetreatment in NMDC's Project Hospitals at anexpenditure of Rs.266.18 lakhs.
Hospital on Wheels
Introduced Medicare through "Hospital on Wheels"in Bailadila, C.G. and Sitapur, U.P. 18059 patientsfrom interior villages have been benefitted.
Medical College at Jagdalpur
Contributed Rs.2000 lakhs as the third and fourthinstallments for Medical College at Jagdalpur. Sofar, Rs.4000 lakhs have been provided against totalcommitment of Rs.5000 lakhs.
ADOPTION OF VILLAGES
Action initiated to adopt 58 villages in C.G. forproviding intensive assistance on Healthcare,Sanitation, Employment generation & Communitydevelopment in these villages.
Pre-project survey completed in 45 vil lages, 9villages earmarked as "NMDC Adarsh Gaon".
Work in progress in two NMDC Adarsh Gaon.
SOLAR ELECTRIFICATION
Solar electr i f icat ion has been init iated in thehouses of the villages of Dantewara & KuakondaBlocks of Dantewara distr ict alongwith streetl ighting in Bijapur, Dantewara, Jagdalpur andNarayanpur districts of C.G. at a total cost ofRs.1611.29 lakhs.
INFRASTRUCTURE DEVELOPMENT
Assistance to State Governments
Financial assistance provided to initiatives taken byState Governments for Social development.
Rs.989.35 lakhs to Bailadila Sector for variousconstruction works.
Rs.1500.00 lakhs to Donimalai Sector forconstruction of 36,630 houses in 300 acres ofland.
NMDC Limited
14
Infrastructure development work taken up directlyby NMDC
Bailadila : Roads, Culverts, Community Halls etc ata cost of Rs.923.8 lakhs.
In Kadampal Village - A NMDC Adarsh Gaon -Infrastructural works amounting to Rs.696.34 lakhshave been initiated.
Donimalai : Various development works amountingto Rs.1500.00 lakhs were initiated.
Other CSR Works
� For Flood relief measures both temporary andpermanent Rs.1317.18 lakhs contributed.
� Distr ibuted 80 Tri-Cycles to physical lychallenged people in Rewa, M.P.
� Distributed uniforms to all 1200 deaf studentsand Computers to the special schools in thetwin cities of Hyderabad and Secunderabad onWorld Disability Day.
22. Implementation of Right to InformationAct, 2005
Your Company is proactively complying with theprovisions of the Right to Information Act, 2005. Allinformation sought under the Act have beenfurnished within the stipulated time period.
23.0 ACKNOWLEDGEMENT
Your Directors gratefully acknowledge the support,cooperation and guidance received from the Ministry
of Steel, Ministry of Mines and Ministry of Forests& Environment, the Department of Science andTechnology and other Departments of Governmentof India and the State Governments of AndhraPradesh, Chhattisgarh, Karnataka, Madhya Pradeshand Jharkhand.
Your Directors acknowledge the support extendedby the valued and esteemed international andnational customers, Shareholders stakeholders,MMTC, Chennai Port Trust, Visakhapatnam PortTrust, Railways and other Departments of theCentral and State Governments. We believe that ourlong-term success is dependant on our long-termcustomer relationship and responsiveness. We willdo everything possible to provide our customersbetter, timely and value added services.
The success of your Company is due to thecommitment and dedicated efforts of the managersand employees at all levels. Your Directors placeon record their appreciation and also acknowledgethe support and co-operation of All India NMDCWorkers' Federation and their members for thesmooth functioning of the Company's operations.
For and on behalf of theBoard of NMDC Ltd
Rana SomChairman-cum-Managing Director
Place : BangaloreDate : 29.07.2009
NMDC Limited
15
Specific Areas in which R&D works were carriedout by Company
Technology Absorption, Efforts Made inTechnology Absorption
R&D Centre is committed to maintain its excellencein undertaking product and TechnologyDevelopment Missions related to ore and Mineralsthrough continual improvement in processperformance for enhanced customer satisfaction.The R&D Centre functions in the following ThrustAreas:
� Upgradation of processing Technology ofexisting process plants for better productivityand meet the customer requirement.
� Development of Technology for utilization ofmine wastes.
� Development of Value Added products.
NMDC, being one of the MOU signingcompanies, has set yearly targets for all unitsincluding R&D. In this direction R&D Centrehas achieved rating of "Excellent" in the MOUperformance indicator.
Achievements and improvements carried outin the development of new process, products,cost reduction, and quality improvement etc.,of NMDC, R&D Centre during the year arelisted below.
1.0 Technology Development Projects
1.1 UTILIZATION OF BLUE DUST
1.1.1 Pilot Plant Facility for Production of CarbonFree Sponge Iron Powder from Blue dust
� An extensive development work carried out byNMDC in col laboration with DMRL hasestabl ished the feasibi l i ty of producing"Carbon free sponge iron powder "from Bluedust of Bailadila at laboratory scale.
Annexure - IAnnexure to Directors’ Report as required under the Companies
(Disclosure of particulars in Report of Board of Directors) Rules 1988
� Accordingly, a decision has been taken byNMDC to setup a pilot plant of 300 TPAcapacity for production of carbon free spongeiron powder at R&D Centre of NMDC.
� The work of construction of this pilot planthas been awarded to M/s. Gas Institute ofNational Academy of Sciences, Ukraine inJanuary 2006 and the same has beencommissioned on 25.11.2008. The trial runis undergoing for stabilizing the plant by 15thMay, 2009.
� Application areas for this iron powder are insoft - magnetic iron, friction components, foodfortification, micro-motors, food preservationand high compressibility admixes etc.
1.1.2 Nano Crystalline Powder from Blue Dust:
� A technology for production of nano ironpowder using Blue Dust has beenestablished at lab scale in collaboration withMISA (Moscow State Institute of Steel andAlloys). The product is evaluated andaccordingly facilities for the production ofnano iron powder on lab scale are beingcreated at R&D Centre.
� Procurement of critical equipments has beencompleted & civil works are under progress.
� The major applications of nano-structurediron powder are in electromagnetic,automobile, computer, paint, coating,medicinal, pharmaceuticals & chemicalindustries etc.
1.2 BEACH SAND
1.2.1 Development of Indigenous Technology forProduction of value added products fromBeach Sand
� As an initiative to develop an indigenoustechnology for production of value addedproducts from ilmenite obtained from the
NMDC Limited
16
high iron containing beach sands of EastCoast region of India, an extensivedevelopmental work has been carried out.
� As a result of this activity a technology basedon thermal plasma has been established forproduction of Titania slag and pig iron fromEast Coast ilmenite and the same has beendemonstrated at a scale of 30 Kg/hr and100 Kg/hr.
� In view of lack of promising results, NMDChas decided to relinquish the project to otherpartners.
1.3 Setting up of Pilot Plant forCommercialization of Precipitated SilicaSodium Silicate and Zeolite -A:
1.3.1 Studies on "Technical suitability ofutil ization of Kimberlite tailings as aperformance improver in the manufactureof cement as per BIS specifications":
� Studies have been completed for utilizationof Kimberl i te tai l ings as a performanceimprover in cement industries in associationwith M/s National Council of Cement andBuilding Materials lab (NCCBM), Ballabgarh.Report has been submitted to BIS forincluding Kimberl i te tai l ings as aperformance improver in the manufacture ofcement.
1.4 Development of Various Grades of FerritePowders
� NPD has developed four new grades ofMn - Zn Ferrites (PF-6, HP-10, HP-101 &HP-1001).
� NPD has developed two grades of Ni-ZnFerrites.
NZ - 01 (equivalent to F-14 of MMG India)
NZ - 101 (equivalent to F-19 A of MMG India)
� NPD has produced 6.3 MT RTP Ferri tePowder (P-11 & F - 58 grades for MMG IndiaChennai).
� Development of economical process forproduction of high grade Mn3O4, which willbe used as a raw material for the production
of power ferrites. Presently, this material isbeing imported from South Africa & Belgiumand contributes 60% of the total cost ofFerrite.
1.5 ISO - 9000 Certification
Regular internal qual i ty audits andmanagement review meetings were carriedout for effective implementation of Qualitymanagement system. Renewal audit basedon the revised standard of ISO-9001-2000was carried out successfully during October2008 and the Auditors had recommended forcontinuation of "Certificate of approval" forquality management system, which is validupto October 2009.
2.0 Investigation /Exploration Support:
� Processing of 170.84 MT LDD core sample& 1387.07 MT Bulk sample from Anumpallefor recovery of Diamond completed.
� Processing of 31.27 MT of LDD core samplefrom Venkatampalli for recovery of Diamondcompleted.
� Processing of 504.025 MT of Bulk samplefrom Chigicherla for recovery of Diamond iscompleted.
� Processing of 80.240 MT out of 132.29 MTof Kimberl i te LDD from Chigicherlacompleted balance is in progress. .PL areafor recovery of diamond and heavy mineralsis in progress.
� Heavy mineral recovery from the GanjamBeach Sand Bore Hole samples (283samples), East Coast, Orissa - work iscompleted.
3.0 Development Support
� Physical & chemical analysis of fusedMagnesia from Panthal Magnesitecompleted.
� Recovery of iron values from the iron basedresidue/COB from Sukinda Mines, Orissathrough Hydrometal lurgy and physicalbeneficiat ion route. Studies are underprogress.
NMDC Limited
17
� During iron ore mining about 10-12% waste is being generated in the form of low iron value slime,which are lying in tailing dam and creating space and environment problems. Studies of possibleutilization of Slime without beneficiation in sintering are under progress.
� Studies of utilization of Slimes after beneficiation for iron ore pellet making have been completed.
� Studies of utilization of BH5 by beneficiation process has been completed and a demo plant of 60T/Hour capacity is under consideration.
4.0 Production / Projects Support
� 37 no of In-house project works were taken for testing of different iron samples.
5.0 Sponsored Projects
� 28 number of various sponsored Projects were taken up for variety of iron Ores, slimes and tailingsfor evaluation including beneficiation studies, Flowability studies, Magnetic separation testing, physicaland Chemical Analysis etc.
6.0 Future Plans
� Upgradation of technology for beneficiation of low-grade iron ore.
� Creation of facility for reduction under load testing: To determine softening characteristic of iron ore& pellets and optimizing operational parameters in Blast furnace.
� Creation of facility for coke making and testing.
7.0 TOTAL R&D EXPENDITURE AND TURNOVER YEAR WISE
(Rs in Crore)
Year Expenditure on R&D Annual Turnover Percentage (%)
Revenue Capital Total
2006-2007 5.24 1.29 6.53 4150.00 0.16
2007-2008 5.63 4.39 10.02 5711.31 0.18
2008-2009 6.98 13.63 20.61 7564.03 0.27
NMDC Limited
18
Annexure - II
Statement pursuant to Section 212 of the Companies Act, 1956relating to Subsidiary Companies
Particulars J&K Mineral NMDC-CMDC NMDC SARL NAM - IndiaDevelopment Limited Madagascar MineralsCorporation Raipur DevelopmentLimited, Jammu Corporation
(Pty) LimitedNamibia
1.The Financial year of 31st March, 2009 31st March 30th June, 31st March, 2009the Subsidiary Companies 2009 2008ended on
2.a. Paid-up Capital of Rs. 4.74 Crore. Rs.1.50 Crore. FMG N$ 3,967the Subsidiary Company 1,046.40 Cr.
b. Number of shares held 3,96,002 Equity 7,65,000 41,85,590 3,967 Equity sharesby NMDC with its nominees shares of the face Equity shares equity shares of the face valuein the Subsidiaries. value of Rs.100/- of the face of the face of N$1 each fully
each fully paid up. value of value of FMG paid up.Rs.100/- each 2500 eachfull paid up. fully paid up.
c. Extent of interest of holding Rs.3.96 Crore (51%) FMG N$ 3,967 (100%)Company at the end of (83.54%) 1,046.40 Cr.financial year (100%)
3.The net aggregate amountof the Subsidiary Companiesprofit/(loss) so far as itconcerns the members ofthe holding Company.
a. Not dealt with in the holdingCompany’s accounts.
i) For the financial year of Rs. (–) 0.30 Crore Rs. (–) 0.12 – N$ (–) 3.82 LakhSubsidiary Companies Crore
ii) For the previous financialyears of the SubsidiaryCompanies since theybecame the holding Rs. (–) 9.52 Crore – FMG (–) N$ (–) 21.36 LakhCompany’s Subsidiaries. 798.64 Cr.
b. Dealt with in the holdingCompany’s accounts
i) For the financial year ofSubsidiary Companies Nil Nil Nil Nil
ii) For the previous financialyears of the SubsidiaryCompanies since theybecame the holdingCompany’s Subsidiaries. Nil Nil Nil Nil
NMDC Limited
19
1. A brief statement on Company's philosophy
NMDC, a Navaratna Company, believes in financial prudence, customer satisfaction, transparency,accountability and commitment to values. The good governance it practices is based on its stated beliefand the guidelines of the Government of India issued from time to time should go a long way inenhancing value for all those who are associated with the Company: shareholders, customers,suppliers, creditors, Government of India, State Governments, Governmental agencies/ departmentsand the society at large.
2. Board of Directors
a. Composition and category of Directors:
Whole-time Directors
i. Shri Rana Som, Chairman-cum-Managing Director
ii. Shri VK Jain, Director (Production) (upto 31.07.2008)
iii. Shri PS Upadhyaya, Director (Technical) (upto 30-11-2008)
iv. Shri KR Venkateswarlu, Director (Finance)
v. Shri VK Sharma, Director (Commercial)
vi. Shri. S.Venkatesan, Director (Production)(w.e.f., 01.08.2008)
vii. Shri. N.K. Nanda, Director (Technical) (w.e.f. 01-12-2008)
Government of India nominee Directors
i. Shri BS Meena, Addl. Secretary & Financial Adviser, Ministry of Steel
ii. Shri UP Singh, Joint Secretary, Ministry of Steel
Independent Directors
i. Dr Uddesh Kohli (upto 24.10.2008)
ii. Sri YK Sharma (upto 24.10.2008)
iii. Sri RG James Kuttickattu (upto 24.10.2008)
iv. Ms M Prabhavathi (upto 24.10.2008)
v. Dr (Mrs.) Indira Misra
vi. Sri RN Aga
vii. Ms Teresa Bhattacharya
Annexure - III
Report on Corporate Governance
NMDC Limited
20
b. Attendance of each Director at the Board Meeting and the last AGM
Name of the Director No. of No. of Board Last AGMBoard Meetings Meetings Attended attended
held
Shri Rana Som,Chairman-cum-Managing Director 08 08 YES
Shri V.K. Jain,Director (Production) (upto 31.07.2008) 02 02 –
Shri P.S. Upadhyaya,Director (Technical) (upto 30-11-2008) 05 05 YES
Shri K.R. Venkateswarlu,Director (Finance) 08 08 YES
Shri V.K. Sharma,Director (Commercial) 08 08 YES
Shri S. Venkatesan,Director (Production) (w.e.f. 01.08.2008) 06 04 YES
Shri N.K. Nanda,Director (Technical) (w.e.f. 01-12-2008) 03 03 –
Shri U.P. Singh 08 07 NO
Shri B.S. Meena 04 04 NO
Shri Y.K. Sharma(upto 24.10.2008) 04 04 NO
Shri R.G. James Kuttickattu(upto 24.10.2008) 04 04 NO
Dr. Uddesh Kohli(upto 24.10.2008) 04 04 YES
Ms. M. Prabhavathi(upto 24.10.2008) 04 04 NO
Shri R.N. Aga, 08 08 NO
Dr. (Mrs.) Indira Misra 08 08 NO
Ms. Teresa Bhattacharya 08 05 NO
NMDC Limited
21
c. Number of other Boards or Board Committees in which he/she is a Member or Chairperson
Name of the Director No. of Directorship and CommitteeMembership / Chairmanship
Other Committee CommitteeDirectorship Membership* Chairmanship
Sri Rana Som,Chairman cum Managing Director 2 – 1
Sri V.K. Jain,Director (Production) (upto 31.07.2008) 2 2 –
Sri P.S. Upadhyaya,Director (Technical) (upto 30-11-2008) 2 1 –
Sri K.R. Venkateswarlu,Director (Finance) 2 2 –
Sri V.K. Sharma,Director (Commercial) 1 1 –
Sri S. Venkatesan,Director (Production) (w.e.f. 01.08.2008) 2 3 –
Sri N.K. Nanda,Director (Technical) (w.e.f. 01-12-2008) 3 1 –
Sri B.S. Meena 4 – –
Sri U.P. Singh 4 – –
Dr. Uddesh Kohli(upto 24.10.2008) 7 – 1
Sri Y.K. Sharma(upto 24.10.2008) 1 1 –
Sri R.G. James Kuttickattu(upto 24.10.2008) – 1 –
Ms. Prabhavathi(upto 24.10.2008) – 1 –
Dr. (Mrs.) Indira Misra – 1 –
Ms. Teresa Bhattacharya – 1 –
Sri R.N. Aga – – 1
* Membership/Chairmanship of only the Audit Committee, Shareholders' Committee, Investor GrievanceCommittee of all Public Limited Companies (clause 49).
NMDC Limited
22
d. No. of Board Meetings held with dates
During the year 2008-2009, eight (8) Board meetings were held, the details of which are given below:
Sl. No. Date Board Strength No. of Directors Present
1 16.05.08 14 12
2 24.07.08 14 13
3 12.09.08 14 14
4 16.10.08 14 14
5 27.10.08 10 9
6 04.12.08 10 9
7 28.01.09 10 9
8 28.03.09 10 9
3. Audit Committee
i. Brief description of terms of reference
The role of the Audit Committee shall include the following:
� Oversight of the company's financial reporting process and the disclosure of its financialinformation to ensure that the financial statement is correct, sufficient and credible.
� Recommending to the Board the fixation of audit fees.
� Approval of payment to statutory auditors for any other services rendered by the statutoryauditors.
� Reviewing, with the management, the annual financial statements before submission to theBoard for approval, with particular reference to:
� Matters required to be included in the Directors' Responsibility Statement to be included inthe Board's report in terms of clause (2AA) of Sec 217 of the Companies Act, 1956.
� Changes, if any, in accounting policies and practices and reasons for the same.
� Major accounting entries involving estimates based on the exercise of judgment bymanagement.
� Significant adjustments made in the financial statements arising out of audit findings.
� Compliance with listing and other legal requirements relating to financial statements.
� Disclosure of any related party transactions.
� Qualifications in the draft audit report.
� Reviewing, with the management, the quarterly financial statements before submission tothe Board for approval.
NMDC Limited
23
� Reviewing with the management , the statement of uses/application of funds raised throughan issue (public issue, rights issue etc) the statement of funds utilized for the purposes otherthan those stated in the offer document/prospectus/notice and the report submitted by themonitoring agency the utilization of proceeds of a public or right issue, and making appropriaterecommendation to the Board to take up the steps in the matter.
� Reviewing, with the management, performance of internal auditors and adequacy of theinternal control systems.
� Reviewing the adequacy of internal audit function, if any, including the structure of the internalaudit department, staffing and seniority of the official heading the department, reportingstructure coverage and frequency of internal audit.
� Discussion with internal auditors and/or auditors any significant findings and follow upthereon.
� Reviewing the findings of any internal investigations by the internal auditors/auditors/agenciesinto matters where there is suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the Board.
� Discussion with statutory auditors before the audit commences, about the nature and scopeof audit as well as post-audit discussion to ascertain any area of concern.
� To look into the reasons for substantial defaults in the payment to the depositors, debentureholders, shareholders (in case of non-payment of declared dividends) and creditors.
� To review the functioning of the Whistle Blower mechanism, in case the same is existing.
� Carrying out any other function as is mentioned in the terms of reference of the AuditCommittee.
� To review the follow up action on the audit observations of the C&AG audit.
� To review the follow up action taken on the recommendations of Committee on PublicUndertakings of the Parliament.
� Provide an open avenue of communication between the independent auditor, internal auditorand the Board of Directors.
� Review and pre-approve all related party transactions in the Company. For this purpose, theAudit Committee may designate a member who shall be responsible for pre-approving relatedparty transactions.
� Review with the independent auditor the co-ordination of audit efforts to assure completenessof coverage, reduction of redundant efforts, and the effective use of all audit resources.
� Consider and review the following with the independent auditor and the management:
� The adequacy of internal controls including computerized information system controlsand security;
� Related findings and recommendations of the independent auditor and internal auditor,together with the management responses.
NMDC Limited
24
� Consider and review the following with the management, internal auditor and the independentauditor:
� Signif icant f indings during the year, including the status of previous auditrecommendations.
� Any difficulties encountered during audit work including any restrictions on the scopeof activities or access to required information.
ii. Composition, name of Members and Chairperson
The Audit Committee consists of non-executive Directors/independent Directors as follows:
� Dr Uddesh Kohli, Chairman (upto 24.10.08)
� Sri YK Sharma, Member (upto 24.10.08)
� Sri RG James Kuttickattu, Member( upto 24.10.08)
� Ms M Prabhavathi, Member(upto 24.10.08)
� Sri RN Aga, Chairman w.e.f. 27.10.08
� Dr (Mrs.) Indira Misra, Member
� Ms Teresa Bhattacharya, Member
� Shri. S. Venkatesan, Director (Production) w.e.f.4.12.2008
� Sri KR Venkateswarlu, Director (Finance) of the Company, Invitee
� Representatives of Statutory and Internal Auditors - Invitee.
� The Company Secretary acted as the Secretary to the Audit Committee as was laid downunder the provisions of clause 49.
iii. Meetings and attendance during the year
During the year under report, six meetings of the Committee were held. The details of attendanceof the Members are indicated below:
Sl.No. Date Strength of Audit Committee No. of Members Present
1 16.05.08 7 6
2 24.07.08 7 7
3 12.09.08 7 7
4 27.10.08 3 3
5 28.01.09 4 3
6 28.03.09 4 3
NMDC Limited
25
iv. Attendance of each Director at the Audit Committee meetings
Name of the Directors No of meetings held No. of meetings attended
Dr. Uddesh Kohli (upto 24.10.2008) 03 03
Sri Y.K. Sharma (upto 24.10.2008) 03 03
Sri RG James Kuttickattu (upto 24.10.2008) 03 03
Ms. M. Prabhavathi (upto 24.10.2008) 03 03
Sri R.N. Aga 06 06
Dr. (Mrs.) Indira Misra 06 06
Ms. Teresa Bhattacharya 06 04
Shri S. Venkatesan (w.e.f. 4-12-2008) 02 01
4. Remuneration Committee
A Remuneration Committee was constituted by the Board at its 358th meeting held on 14 June 2002.
The Committee observed that the remuneration of the whole-time Directors is paid as per the termsof their appointment orders issued by the Government of India.
The non-executive Directors are paid sitting fee as per the guidelines issued by the Government ofIndia.
Considering the above position and that the Committee has no specific role to play, the Board at its393rd meeting held on 31 Oct 2006 dissolved the Committee.
During the year under review, the part-time Directors (Independent Directors) were paid sitting feesof Rs. 10,000/- per meeting or a Committee meeting thereof . Govt. Directors and Functional Directorsare not paid sitting fees for attending the meeting of the Board or any Committee meeting thereof.
The details of remuneration paid to Functional Directors during the financial year 2008-09 are as follows:
(In Rs)
Name of the Director All elements of Details of fixed Other benefitsremuneration package component of the Directors i.e. and performance
salary, benefit, linked incentivebonus pension etc #
Shri Rana Som,Chairman-cum-Managing Director 1358841 – 313357
Shri V.K. Jain,Director (Production) (upto 31.07.2008) 1398281 – 118172
Shri P.S. Upadhyaya,Director (Technical) (upto 30-11-2008) 1701456 – 218157
Shri K.R. Venkateswarlu, Director (Finance) 1407435 – 299995
Shri V.K. Sharma, Director (Commercial) 1260241 – 274544
Shri S. Venkatesan,Director (Production) (w.e.f. 01.08.2008) 1254449 – 211795
Shri N.K. Nanda,Director (Technical) (w.e.f. 01-12-2008) 1284778 – 234356
# As per existing pay scales
NMDC Limited
26
The Company has not introduced any stock option scheme. During the year, the part-time non-officialDirectors (Independent Director) received sitting fees for attending the meetings of the Board/Committeesas follows:
Name of the Directors Sitting Fees (In Rs.)
Dr. Uddesh Kohli (upto 24.10.2008) 110000/-
Sri Y.K. Sharma (upto 24.10.2008) 70000/-
Sri RG James Kuttickattu (upto 24.10.2008) 110000/-
Ms. M. Prabhavathi (upto 24.10.2008) 110000/-
Sri R.N. Aga 150000/-
Dr. (Mrs.) Indira Misra 170000/-
Ms. Teresa Bhattacharya 90000/-
Shri S. Venkatesan* NIL
* Sitting Fees is not payable to Shri. S. Venkatesan.
5. Shareholders Committee
i. Share Transfer Committee
The Board has constituted the Share Transfer Committee to consider and approve all related issuesof Shares and Share transfers. The Members of the Committee are as under:
1. Chairman-cum-Managing Director
2. Director (Finance)
3. Director (Commercial)
4. Director (Production)
5. Director (Technical)
6. Company Secretary
7. Dy. Secretary (w.e.f.27-10-2008)
NMDC Limited
27
During the year under report, fifteen meetings of the Committee were held. The details of attendance of theMembers are indicated below:
Sl.No. Date Strength of Share No. of Members presentTransfer Committee
1. 04.04.08 6 6
2. 11.04.08 6 4
3. 22.04.08 6 5
4. 22.05.08 6 3
5. 13.06.08 6 5
6. 25.07.08 7 4
7. 08.08.08 6 6
8. 11.08.08 6 6
9. 18.09.08 6 6
10. 18.10.08 6 6
11. 17.12.08 7 7
12. 20.01.09 7 6
13. 03.02.09 7 7
14. 12.03.09 7 7
15. 31.03.09 7 7
Attendance of each Members at the Share Transfer Committee meetings
Name of the Directors No. of meetings held No. of meetings attended
Chairman-cum-managing Director 15 14
Director (Production) 15 13
Director (Technical) 15 11
Director (Finance) 15 13
Director (Commercial) 15 14
Company Secretary 15 15
Dy. Secretary & Compliance Officer 5 5
NMDC Limited
28
ii. Name and designation of the Compliance Officer: Mohammad Imam, Dy. Secretary
iii. Details in respect of shareholders' complaints :
� No of shareholders complaints received so far-22
� No.not solved to the satisfaction of the shareholders-Nil
� Number of pending complaints-Nil
iv. Shareholders'/Investors' Grievance Committee
Composition: The Board has constituted the Shareholders'/Investors' Grievance comprising Chairmanof Audit Committee (Chairman of the Committee) and Director (Production) and Director (Finance) asMembers.
During the year 2008-2009, one meeting was held on 12th January 2009, where all the membersattended.
6. General Body Meeting
i. Location and time where last three AGMs held.
ii. Whether any special resolution passed in the previous 3 AGMs.
The Annual General Meetings of the Company are held at the Registered Office of the Company.The details of the General Meetings held for the past three years are as under:
Nature of Meeting Date & time Special Resolutions passed
48th Annual General Meeting 31.07.06 at 1530 hrs Six
49th Annual General Meeting 31.08.07 at 1530 hrs Six
50th Annual General Meeting 08.08.08 at 1530 hrs Five
iii. During the year 2008-09, there was no occasion to resort to Postal Ballot for consideration ofthe shareholders of the Company.
7. Disclosures
i. There was no 'materially significant related party transactions' that may have a potential conflictwith the interests of Company, attracting the provisions of Sec. 297 of the Companies Act, 1956.
ii. There was no case of non-compliance of statutory provisions of the Companies Act, 1956 or SEBIRegulations or provisions of Listing Agreement, or any other statutory authority. These authoritieshave not passed any strictures or imposed any penalty on the Company on any matter relatedto capital markets during last three years.
iii. No personnel of the Company has been denied access to the Audit Committee.
iv. The Company has complied with the requirement of Clause 49 and DPE Guidelines on CorporateGovernance except provision relating to composition of the Board of Directors relating to no. ofIndependent Director for which Ministry of Steel, Government of India is taking necessary actionas NMDC is a Government Company.
NMDC Limited
29
In respect of non-mandatory requirements as prescribed in AnnexureI D to Clause 49 of the ListingAgreement, the extent of compliance is as under :
� The Chairman cum Managing Director of the Company who is in whole time employment,is the Chairman of the Board. Therefore, there is no need for maintenance of a separateChairman's office. Independent Directors are appointed by Ministry of Steel, Govt. of Indiafor a tenure not exceeding three years. No independent Directors has served in aggregatefor a period of nine years.
� In respect of Remuneration Committee, details has been outlined in Sl. 4.
� Training of Directors of the Company on Corporate Governance is given from time to time.
� No person has been denied access to the Audit Committee.
v. Other than the sitting fees paid (Rs.10,000/- per sitting as determined by the Government of India),part-time Directors have had no pecuniary relationship or transactions with the Company duringthe year under report.
vi. Items of expenditure debited in books of accounts, which are not for the purposes of the business.
Nil.
vii. Expenses incurred which are personal in nature and incurred for the Boards of Directors and TopManagement.
Nil
viii. Statutory Auditors' Certificate on Corporate Governance - attached.
8. Means of communication
The Company publishes quarterly Un-audited/Audited financial results through leading National DailyCommercial/Economic newspapers and also Local language Daily newspapers including Hindi Dailynewspaper.
These results are also posted on Company's website: www.nmdc.co.in
In addition, the Company communicates major achievements and important events taking place in theCompany through Press, Electronic Media and also on its Website.
NMDC Limited
30
9. General Shareholders Information
i. AGM date, time and venue
Date Time Venue
29.08.2009 3.30 P.M. Regd. Office of NMDC, Khanij Bhavan, Masab Tank,Hyderabad
ii. Financial Calendar for 2009-10
1st quarter results (Unaudited) on or before 31.07.2009
2nd quarter results (Unaudited) on or before 31.10.2009
3rd quarter results (Unaudited) on or before 31.01.2010
4th quarter results (Unaudited) on or before 30.04.2010
4th quarter results (Audited) on or before 30.06.2010
iii. Date of Book Closure : From 22.08.2009 to 29.08.2009 (both days inclusive)
iv. Dividend Payment date
Dividend to be paid within 30 days of declaration.
v. Listing on Stock Exchanges
NMDC shares are listed on Stock Exchanges at Bangalore, Chennai, Mumbai, Kolkata and NewDelhi and National Stock Exchange, Mumbai. Listing Fees for the year 2008-09 has been paidto all the Stock Exchanges.
vi. Stock Code : 526371
vii. Market price data: High, Low during each month in last financial year
Year Month Highest Lowest
2008 April 13461.10 1196.60
2008 May 1570.45 411.10
2008 June 425.00 274.45
2008 July 329.60 208.70
2008 August 381.50 288.00
2008 September 324.80 201.25
2008 October 226.15 140.20
2008 November 204.05 115.20
2008 December 194.40 120.10
2009 January 200.70 140.00
2009 February 176.25 147.00
2009 March 172.00 140.30
The Company split the face value of the share to Re.1 per share from Rs. 10 per share on 21st April, 2008.
NMDC Limited
31
viii. Performance in comparison to broad based indices such as BSE Sensex, CRISIL Index etc.
ix. Registrar & Transfer Agent
The Company has appointed Aarthi Consultants Pvt Ltd, Hyderabad as Share Transfer Agent of NMDCfor looking after the works relating to share transfer/transmission etc., and dematerialization of sharesof NMDC with CDSL and NSDL.
x. Share Transfer System
The Company has a Share Transfer Committee comprising of all the Functional Directors, CompanySecretary and Deputy Secretary which considers the request for Transfer/ Transmission of shares,dematerialization of shares etc., The share transfer committee considers request for issue of sharecertificates. Transfers in physical form are registered after ascertaining objections, if any, from thetransferors; and no valid transfer application are kept pending beyond the stipulated period of thirtydays. Requests for dematerialization of shares are processed and confirmation is given to the respectivedepositories viz, NSDL and CDSL within 15 days.
500
450
400
350
300
250
200
150
100
50
0
NM
DC
Sh
are
Pri
ce
Apr’ May’ Jun’ Jul’ Aug’ Sep’ Oct’ Nov’ Dec’ Jan’ Feb’ Mar’2008 2008 2008 2008 2008 2008 2008 2008 2008 2009 2009 2009
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
BS
E 1
00
472.089199.46
(1416.25)*
8683.27414.4
7621.47488.48
7020.74329.6
274.45
6691.57
303.05
4953.98
216.24600.45
4988.044790.32
4516.38
4942.51
143.8
165.2
125.8
166.55
151.55
156.7
NMDC LIMITEDShare prices / BSE 100 Monthly Close Quotations
* The Company issued bonus shares in the month of May’ 2008 andthe share price in April 2008 is equated accordingly
NMDC
BSE 100
NMDC Limited
32
xi. Distribution of Shareholding as on 31.03.2009, pursuant to clause 35 of the Listing Agreementwith the Stock Exchanges:
NMDC LIMITEDSHAREHOLDING PATTERN AS ON 31/03/2009
(CONSOLIDATED)
Category Category of Number Total Number Total share- Shares pledgedcode Shareholder of Number of shares holding as a or otherwise
Share of shares held in percentage of encumberedholders demateria- total number
lised form of shares
As a As a Number As aPercen- Percen- of Perce-tage of tage Shares ntage (A+B)1 of
(A+B+C)
(A) Shareholding ofPromoterand Promoter Group
(1) Indian
a. Individuals/Hindu Undivided Family 0 0 0 0 0 0 0
b. Central Government/State Government(s) 1 3900661380 0 98.38 98.38 0 0
c. Bodies Corporate 0 0 0 0 0 0 0
d. Financial Institutions/Banks 0 0 0 0 0 0 0
Others 0 0 0 0 0 0 0
e. Mutual Funds 0 0 0 0 0 0 0
f. Trusts 0 0 0 0 0 0 0
Sub Total (A)(1) 1 3900661380 0 98.38 98.38 0 0
(2) Foreign
a. Individuals (Non ResidentIndividuals/ForeignIndividuals) 0 0 0 0 0 0 0
b. Bodies Corporate 0 0 0 0 0 0 0
c. Institutions 0 0 0 0 0 0 0
Others : 0 0 0 0 0 0 0
d. Overseas Corporate Bodies 0 0 0 0 0 0 0
Sub Total (A)(2) 0 0 0 0 0 0 0
Total Shareholdingof Promoter andPromoter Group
(A)=(A)(1)+(A)(2) 1 3900661380 0 98.38 98.38 0 0
(B) Public Shareholding
(1) Institutions
a. Mutual Funds/UTI 1 5102000 5102000 0.13 0.13 0 0
b. Financial Institutions/Banks 1 60000 60000 0 0 0 0
c. Central Government/State Government(s) 0 0 0 0 0 0 0
d. Venture Capital Funds 0 0 0 0 0 0 0
NMDC Limited
33
e. Insurance Companies 7 49962822 49956822 1.26 1.26 0 0
f. Foreign InstitutionalInvestors 0 0 0 0 0 0 0
g. Foreign VentureCapital Investors 0 0 0 0 0 0 0
Others 0 0 0 0 0 0 0
h. Foreign Companies 0 0 0 0 0 0 0
Sub Total (B)(1) 9 55124822 55118822 1.39 1.39 0 0
(2) Non-Institutions
a. Bodies Corporate 663 3202451 3059451 0.08 0.08 0 0
b. Individuals 0 0 0 0 0 0 0
i. Individual shareholdersholding nominalshare capitalupto Rs.1 lakh 20520 5174495 4781573 0.13 0.13 0 0
ii. Individual shareholdersholding nominalshare capitalin excess of Rs.1 lakh 1 108930 108930 0 0 0 0
Others
c. Non ResidentIndividuals 222 245020 245020 0.01 0.01 0 0
d. Overseas CorporateBodies 0 0 0 0 0 0 0
e. Trusts 5 38600 38600 0 0 0 0
f. Employees 74 92455 33235 0 0 0 0
g. Clearing Members 131 67847 67847 0 0 0 0
h. Foreign Nationals 0 0 0 0 0 0 0
Sub Total (B)(2) 21616 8929798 8334656 0.23 0.23 0 0
Total PublicShareholding(B)=(B)(1)+(B)(2) 21625 64054620 63453478 1.62 1.62 0 0
Total (A)+(B) 21626 3964716000 63453478 100 100 0 0
(C) Shares held byCustodians and againstDepository Receiptshave been issued 0 0 0 0 0 0 0
Grand Total (A)+(B)+(C) 21626 3964716000 63453478 100 100 0 0
Category Category of Number Total Number Total share- Shares pledgedcode Shareholder of Number of shares holding as a or otherwise
Share of shares held in percentage of encumberedholders demateria- total number
lised form of shares
As a As a Number As aPercen- Percen- of Perce-tage of tage Shares ntage (A+B)1 of
(A+B+C)
NMDC Limited
34
xii. Dematerialization of shares and liquidity
The shares of the Company are dematerialized with Central Depository Services (India) Ltd and NationalSecurities Depository Limited.
xiii. Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impacton equity : NIL
xiv. Plant Locations :
The mines of the Company are located in the following locations:
a. Bailadila Iron Ore MineKirandul ComplexP.O. KirandulDistt: Dantewada (Chhattisgarh)
b. Bailadila Iron Ore MineBacheli ComplexP.O. BacheliDist: Dantewada (Chattisgarh)
c. Donimalai Iron Ore MineDonimalai TownshipDist: Bellary - 583 118, Karnataka
d. Diamond Mining ProjectMajhgawan, Panna - 488 001 (MP)
xv. Address for correspondence :
Company SecretaryNMDC LimitedRegd. Office: 10-3-311/ACastle Hills, Masab TankHyderabad - 500 173E-mail: [email protected]
NMDC Limited
35
Management Discussion & Analysis Report
1. Industry structure and developments
Established in 1958, over the years, NMDC has grown to be India's largest single iron ore producer,operating its mines in Chhattisgarh and Karnataka. Adopting modern technologies and commitmentto quality of its products, NMDC is determined to be a world-class eco-friendly mining organization.NMDC has been paying dividends for the last 19 years.
The iron ore industry being cyclic in nature, NMDC is exposed to sharp fluctuation in demand for itsproducts. The demand for Iron ore is related to growth of Indian economy and also that of the globaleconomy reflected primarily in the growth of the infrastructure sector. The sharp fall in the Iron andsteel sector in the prevailing recessionary conditions globally has led to short fall in global consumptionof Iron and steel.
2. Strength and weakness
Strength
� Financial strength characterized by high net worth, zero debt, good credit rating.
� Good work culture - skilled, experienced and dedicated workforce.
� Brand image of NMDC's iron ore in domestic/international market.
� Highly mechanized iron ore mines.
� Availability of technology and infrastructure of existing projects in Bailadila to add new projectsin the area with comparatively less investment.
� Core competence in iron ore mining.
� In-house R&D capability.
Weakness
� Remote location of the projects acting as deterrent in attracting and retaining talent and also forreaching supplies and services.
� Delay in forest and environmental and other clearances affecting time schedules for opening andcommissioning new mines and affecting our investment plans.
� Extreme foggy weather conditions causing stoppage of mining operations at Bailadila complexduring monsoon months.
� The Company has not diversified into other sector. As such, any adverse impact on the miningsector hits the profitability of the Company.
� As a mining Company, NMDC is subject to extensive regulations surrounding health, safety ofthe people and environment. However, regulatory standards and community expectations areconstantly evolving and as a result the Company is exposed to increased litigation compliancecost and unforeseen environmental remediation expenses apart from constraints in operations.
Annexure - IV
NMDC Limited
36
iii. Opportunities and Threats
Opportunities
� Diversification in steel production
� Financial powers for investment in new projects as a Navaratna Company.
� Exploration and mining opportunities in India and abroad for high value minerals.
� Diversification into other areas for sustained growth.
Threats
� Disturbances due to Maoists activities in Bailadila area.
� Intense competition from private sector in securing fresh mining leases, resulting in denial ofleases in many cases and litigation delaying actions.
� Entry of MNCs and other Indian private companies into iron ore mining.
� The industry being cyclic in nature, NMDC is exposed to sharp fluctuations in demand for itsproducts.
� The Company faces risks in respect of high inventory of stocks and its disposal.
3. Product-wise performance
Financial Performance of NMDC(Rs. in Cr.)
Details 2004-05 2005-06 2006-07 2007-08 2008-09
Sale of Iron Ore 2180.58 3669.47 4170.92 5705.32 7559.11
Sale of Diamonds 43.82 35.69 10.60 3.75 –
Sale of Wind Power – – – – 2.22
Turnover 2229.99 3710.92 4185.84 5711.31 7564.03
PBT 1223.65 2770.13 3498.31 4947.47 6648.23
PAT 755.44 1827.80 2320.21 3250.98 4372.38
Dividend 151.32 365.57 465.19 651.53 876.20
Physical Performance of NMDC
Details 2004-05 2005-06 2006-07 2007-08 2008-09
Production of Iron Ore (mt) 20.74 22.92 26.23 29.82 28.52
Production of Diamonds (carats) 78217 43878 1703 – –
Sale of Iron Ore (mt) 23.22 24.85 25.59 28.18 26.47
Sale of Diamonds (carats) 86257 48825 14588 2632 –
4. Outlook
NMDC proposes to augment its production of iron ore from the present level of 30 million to 50 milliontonnes by 2015. It also has chalked out plans for value addition by setting up pelletization plants inChhattisgarh and Karnataka utilizing the slimes and an integrated steel plant in Chhattisgarh. NMDCis also planning to venture into coal mining.
The present global recession will affect the performance of the Company.
5. Risks and concerns
The major risk NMDC is facing is the Maoists' attacks on and around its project at Bailadila on andoff. Though such attacks have not made much impact on production, yet the movement of ore fromthe Bailadila sector has been considerably affected. The company is in contact with the Government
NMDC Limited
37
agencies for support and protection of its people and installations. The initiatives taken by theGovernment of Chhattisgarh and the Central Government are expected to find a solution to the riskat the earliest.
The serious concern for NMDC in expanding its activities is the hurdle the Company is encounteringin getting mining leases. All out efforts are being made to see that the Company gets the requiredmining leases for its expansion.
The industry being cyclic in nature, NMDC is exposed to sharp fluctuations in demand for its products.The Company also faces risks in respect of high inventory of stocks and its disposal.
6. Internal control systems and their adequacy
NMDC has put in place all the necessary internal controls and they are found quite adequate.
7. Discussion on financial performance with respect to operational performance.
NMDC's operational performance has been quite commendable as can be seen from the results oflast five years. From about 18 million tonnes of iron ore production in 2003-04, the company has reachedaround 30 million tonnes and 29 million tones in 2007-08 and 2008-09 respectively. The contributionfrom other minerals like diamond, silica sand etc being marginal, it does not have any influence onthe company's performance. The Company has also recorded sale of wind power of Rs. 2.22. crore.for the year under review. On the financial performance, the turnover of the Company has gone up fromabout Rs. 1532 crore in 2003-04 to about Rs. 7564 crore. So also, in the same period, profit beforetax gone up from about Rs.616 crore to Rs. 6648 crore. The net worth of the Company has also goneup from about Rs.1967 crore to about Rs. 11615 crore; and the earnings per share has gone up fromabout Re.1.09 to Re. 11.03. During this period, the Company has earned 'Excellent' rating on the MoUit has been signing with the Ministry of Steel.
8. Material developments in Human Resources/ Industrial Relations front, including number of peopleemployed.
The employees of the Company have been dedicated and loyal to the Company. Though there hasbeen attrition in certain disciplines, the employees in general have remained with the Company throughthick and thin. On the part of the Management, it is ensuring all-round comfort levels to its employees,including the required training at all levels based on the need.
It is worth highlighting that industrial relation has been cordial all along. Any difference is sorted outthrough discussions at appropriate levels. The support of workmen needs special mention.
The Company is planning various diversification projects viz. Steel Plant, Pellet Plant, coal miningetc. Since inception, the employees of the Company are exposed only to Iron Ore industry. TheCompany's diversification project needs people with specific skill and knowledge in other industriesviz. upgradation of skills for operating equipment with latest technology. In order to get people withrequisite knowledge and skills, the Company has to train /retrain its existing manpower and also togo for fresh induction.
During the last five years, the number of people employed is as follows:
2004-05 : 5,620
2005-06 : 5,667
2006-07 : 5,582
2007-08 : 5,560
2008-09 : 5,652
NMDC Limited
38
NMDC Limited
39
Chief Executive Officer (CEO) andChief Financial Officer (CFO) Certification
We, Rana Som, Chief Executive Officer and Chairman-cum-Managing Director and K.R. Venkateswarlu,Chief Financial Officer and Director (Finance) of NMDC Limited, to the best of our knowledge and belief,certify that :
1. We have reviewed the balance sheet and profit and loss account and all its schedules and notes onaccounts, as well as the cash flow statements and the directors' report.
2. Based on our knowledge and information, these statements do not contain any untrue statement ofa material fact or omit to state a material fact necessary to make the statements made, in light ofthe circumstances under which such statements were made, not misleading with respect to thestatements made;
3. Based on our knowledge and information, the financial statements, and other financial informationincluded in this report, present in all material respects, a true and fair view of the company's affairs,the financial condition, results of operations and cash flows of the company as of, and for, theperiods presented in this report, and are in compliance with the existing accounting standardsand / or applicable laws and regulations;
4. To the best of our knowledge and belief, no transactions entered into by the company during theyear are fraudulent, illegal or violative of the company's code of conduct;
5. We have disclosed based on our most recent evaluation, wherever applicable, to the company'sauditors and the audit committee of the company's Board of Directors (and persons performing theequivalent functions)
(a) All deficiencies in the design or operation of internal controls, which could adversely affect thecompany's ability to record, process, summarize and report financial data, and have identifiedfor the company's auditors, any material weaknesses in internal controls over financial reportingincluding any corrective actions with regard to deficiencies;
(b) Significant changes in internal controls during the year covered by this report;
(c) All significant changes in accounting policies during the year, if any, and that the same havebeen disclosed in the notes to the financial statements.
6. We further declare that all Board members and senior managerial personnel have affirmed compliancewith the code of conduct for the current year.
(K.R. Venkateswarlu) (Rana Som)Director (Finance) & CFO Chairman-Cum-Managing Director & CEO
Place : New DelhiDate : 29.05.2009
NMDC Limited
40
Ten Years Performance2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 99-2000
Operating Statistics:Production @1 Iron Ore (WMT) (in million tonnes) 28 .52 29.82 26.23 22.92 20.74 17.96 16.97 15.63 15.05 13.57
2 Diamonds (Carats) 0.00 0.00 1703.00 43878 78217 71163 84348 81251 56955 40230
Sales1 Iron Ore (WMT) (in million tonnes) 26 .47 28.18 25.59 24.85 23.22 20.66 19.51 17.46 18.15 15.15
2 Diamonds (Carats) 0.00 2632 14588 48825 86257 84097 70787 76944 44514 43322
Financial Statistics:Income1 Sales Iron Ore 7559.11 5705.32 4170.92 3669.47 2180.58 1411.39 1177.28 1092.98 986.96 765.13
2 Sales Diamonds 0.00 3.75 10.60 35.69 43.82 36.19 31.17 33.78 24.48 20.17
3 Sale of Power 2.22 – – – – – – – – –
4 Sales Others 0.08 0.09 1.34 2.22 2.15 1.27 1.13 0.32 0.65 0.86
5 Income from services 2.62 2.15 2.98 3.54 3.44 4.84 4.65 2.97 2.96 4.33
6 Other Income 884.04 670.53 354.69 199.93 105.28 77.07 97.15 99.87 59.95 49.11
7 Stock Adjustments 127.39 30.17 -6.49 4.42 -3.75 1.94 -17.95 38.19 12.86 5.18
8575.46 6412.01 4534.04 3915.27 2331.52 1532.70 1293.43 1268.11 1087.86 844.78
PROFIT1 Profit before depreciation, 6721.79 5007.47 3578.33 2883.82 1287.49 670.00 462.46 388.93 352.14 241.07
Interest & Taxes
2 Depreciation 73 .56 60.00 80.02 113.69 63.84 53.98 42.28 39.92 36.10 33.36
3 Interest 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.07 0.00 0.00
4 Profit before tax 6648.23 4947.47 3498.31 2770.13 1223.65 616.02 420.18 343.94 316.04 207.72
5 Taxes 2275.85 1696.49 1178.10 942.33 468.21 183.39 107.98 87.39 81.06 47.72
6 Profit/Loss after depreciation 4372.38 3250.98 2320.21 1827.80 755.44 432.63 312.20 256.55 234.98 160.00Interest & Taxes
7 Dividend 876.20 651.53 465.19 365.57 151.32 46.25 39.65 33.04 33.04 33.04
FINANCIAL POSITION1 Equity (^) 396.47 132.16 132.16 132.16 132.16 132.16 132.16 132.16 132.16 132.16
2 Reserves & Surplus 11240.44 8157.49 5668.77 3882.32 2471.36 1893.20 1512.75 1245.27 1017.10 818.62
3 Gross Fixed Assets 1669.17 1421.40 1304.15 1259.68 1176.78 1148.15 807.10 757.08 742.69 689.07
4 Net Fixed Assets 746.63 568.06 504.90 530.16 537.44 574.27 285.16 272.64 293.76 274.75
5 Other Assets (intangible) $ 22 .20 24.55 26.80 29.95 34.75 58.49 53.17 45.27 25.31 21.70
6 Capital Work-in-Progress 248.31 111.83 112.97 56.16 31.47 66.24 374.34 340.85 306.25 272.34
7 Current Assets 11771.02 8282.70 5525.84 4742.14 2804.78 1923.10 1457.96 1148.56 986.41 863.01
8 Current Liabilities 1164.75 774.76 417.36 1399.32 866.64 675.68 572.19 454.39 496.37 522.68
9 Deferred Tax Asset -58.04 -6.01 -26.60 -18.46 -12.13 6.87 13.64 9.91
10 Captial Employed * 11352.90 8076.00 5613.38 3872.98 2475.58 1821.69 1170.93 966.81 783.80 615.08
11 Net Worth 11614.71 8265.10 5774.13 3984.53 2568.77 1966.87 1591.74 1332.16 1123.95 929.08
12 Book value per share (Rs.) (^) 29 .30 625.40 436.91 301.50 194.37 148.83 120.44 100.80 85.05 70.30
13 Earning per share (Rs.) (^) 11.03 245.99 175.56 138.30 57.16 32.74 23.62 19.41 17.87 12.11
@ Production figures as per Balance Sheet$ Includes Expenditure on Feasibility studies from 1999-00 to 2003-04.* Excludes Investments(^) During 2008-09, Equity share splitted from Rs.10/- per share to Rs.1/- per share and Bonus shares issued in the ratio of 1:2.
(Rs. in Crore)
NMDC Limited
41
(Rs. in Crore)
2008-2009 2007-2008
HOW VALUE IS GENERATED:
Value of Production 7,691.42 5,741.48
Less : Direct Material, Power & Water charges, Royalty & Freight 822.26 464.73
Total Value Added 6,869.16 5,276.75
HOW VALUE IS DISTRIBUTED:
A. Employees
Payments & Benefits 420.19 355.21
B. Suppliers of Materials and Services
Stores & Spares 144.90 115.86
Selling Expenses 203.95 202.49
Others (Net of Miscellaneous Income) -653.55 -424.97
TOTAL -304.70 -106.62
C. Society - Corporate Social Responsibility 33.30 21.75
D. Govt.Payments - Income Tax 2,424.76 1,807.22
E. Providers of Capital
Shareholders - Dividend 876.20 651.53
TOTAL 876.20 651.53
F. Re-investment in the Business
Depreciation 72.66 59.16
Operational Profit 3,346.75 2,488.50
TOTAL 3,419.41 2,547.66
Total Value Distributed 6,869.16 5,276.75
Average Number of Employees 5,596 5,571
Value added per employee (Rs. in lakh) 122.75 94.72
Value Added Statementfor the year 2008-09
NMDC Limited
42
ToThe Members,NMDC Ltd
We have audited the attached Balance Sheet ofNMDC LIMITED (The company) as at 31st March,
2009 and also the Profit and Loss Account of the
Company for the year ended on that date annexedthereto, into which are incorporated the accounts
of eight Projects / Units audited by Branch Auditorsand in respect of Head Off ice and R&D Labs
audited by us, and the cash flow statement for the
year ended on that date. These financial statementsare the responsibi l i ty of the Company's
management. Our responsibility is to express anopinion on these financial statements based on our
audit.
We conducted our audit in accordance with the
auditing standards generally accepted in India.
Those Standards require that we plan and performthe audit to obtain reasonable assurance about
whether the f inancial statements are free ofmaterial misstatement. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the f inancialstatements. An audit also includes assessing the
accounting principles used and signif icant
estimates made by management, as well asevaluating the overal l f inancial statement
presentation. We believe that our audit provides areasonable basis for our opinion.
As required by the Companies (Auditor's Report)Order, 2003 issued by the Central Government of
India in terms of sub-section (4A) of Section 227
of the Companies Act, 1956 we enclose in theAnnexure a statement on the matters specified in
Auditors’ Report
paragraphs 4 & 5 of the said Order, to the extentapplicable.
1. Further to our comments in the Annexure
referred to above, we report that:
(a) We have obtained all the information and
explanations, which to the best of ourknowledge and belief were necessary for
the purposes of our audit;
(b) In our opinion, proper books of accountas required by law have been kept by the
company so far as appears from our
examination of those books and properreturns adequate for the purpose of our
audit have been received from thebranches not visited by us. The Branch
Auditors Reports have been forwarded to
us and have been appropriately dealtwith;
(c) The Balance Sheet, Profi t and Loss
Account and Cash Flow Statement dealtwith by this report are in agreement with
the books of account and with the
audited returns from the Projects / Units;
(d) In our opinion, the Balance Sheet, Profitand Loss Account and Cash Flow
Statement dealt with by this reportcomply with the accounting standards
referred to in sub-section (3C) of Section
211 of the Companies Act, 1956;
NMDC Limited
43
(e) The Company has informed that
Department of Company affairs vide the
noti f icat ion No. GSR 829(E) dt 21stOctober 2003 noti f ied that Section
274(1)(g) of the Companies Act 1956 isnot appl icable to the Government
Companies. Hence Clause regarding
disqual i f icat ion of directors is notapplicable.
(f) The company has provided for cess
under section 441A of the CompaniesAct, 1956 but the same has not been
deposited, pending noti f icat ion
specifying the manner of payment.
(g) In our opinion and to the best of ourinformation and according to the
explanations given to us, the saidaccounts read with the Signif icant
Accounting Policies and Notes forming
part of accounts appearing in ScheduleNo.24 give the information required by
the Companies Act, 1956 in the manner
so required and give a true and fair view
in conformity with the accounting
principles generally accepted in India:
(i) In the case of the Balance Sheet, of
the state of affairs of the companyas at 31.03.2009;
(ii) In the case of the Profit and Loss
Account, of the profit for the year
ended on that date; and
(iii) In the case of the Cash FlowStatement, of the cash flows for the
year ended on that date.
For RAMAMOORTHY (N) & Co.,Chartered Accountant
(CA Surendranath Bharathi)Partner
Membership No.23837
Place : New Delhi
Date : 29-May-2009
NMDC Limited
44
(i) In respect of Fixed Assets:
(a) The company is generally maintainingproper records showing ful lpart iculars including quanti tat ivedetails and situation of fixed assets.
(b) Al l the assets have not beenphysically verified by the managementduring the year but there is a regularprogram of verification which, in ouropinion, is reasonable having regardto the size of the company and thenature of i ts assets. No materialdiscrepancies were noticed on suchverification.
(c) During the year few fixed assets havebeen disposed off by the company. Onthe basis of information andexplanations given to us, we are of theopinion, that disposal of the part off ixed assets has not affected thegoing concern status of the company.
(ii) In respect of Inventories:
(a) The inventory has been physicallyverified by the management during theyear except the inventory with Thirdparties. In our opinion, the frequencyof verification is reasonable.
(b) In our opinion and according to theinformation and explanation given tous, the procedures of physicalverification of inventory followed by themanagement are reasonable andadequate in relation to the size of thecompany and the nature of i tsbusiness.
(c) According to the information andexplanation given to us, the companyis maintaining proper records ofinventory. The discrepancies noticedon physical verification of inventory as
Annexure to Auditor’s ReportRe: NMDC LIMITED[Referred to in our report of even date]
compared to book records were notmaterial.
(iii) According to the information andexplanations given to us, the company hasneither granted nor taken any loanssecured or unsecured to/from companies,firms or other parties covered in the registermaintained under section 301 of theCompanies Act, 1956 (The Act), henceclauses iii (a, b, c , d, e, f and g) are notapplicable.
(iv) In our opinion and according to theinformation and explanations given to us,there are adequate internal controlprocedures commensurate with the size ofthe company and the nature of its businesswith regard to purchase of inventory, fixedassets and with regard to sale of goods andservices. During the course of our audit, wehave not observed any continuing failure tocorrect major weaknesses in internalcontrols.
(v) In our opinion and according to theinformation and explanation given to us, thecompany has not accepted any depositsfrom the publ ic within the meaning ofSections 58A and 58AA or any other relevantprovision of The Act and the rules framedthere under.
(vi) The company has an internal audit systemcommensurate with the size and nature ofits business.
(vii) The maintenance of cost records underSection 209(1)(d) of The Act has not beenprescribed by the Central government forthe products of the company.
(viii) In respect of Statutory Dues:
(a) According to the information andexplanations given to us and therecords of the company examined by
NMDC Limited
45
us, the company is general lyregular in depositing with appropriateauthorit ies undisputed statutorydues including Provident fund, Investoreducation and protection fund,Employees' state insurance, Income-tax, Sales-tax, Wealth tax, Service tax,Customs duty, Excise duty, Cess andother material statutory duesapplicable to it.
(b) According to information andexplanation given to us, no undisputedamounts payable in respect of
Income tax, Sales tax, Wealth tax,Service tax, Custom duty, Excise dutyand Cess were in arrears, as at31.03.2009 for a period of more thansix months from the date they becamepayable.
(c) According to the information andexplanations given to us, there are duesof Forest Development tax, Entry Tax,Sales tax, Property tax, Export tax,Conservancy Tax, Road Tax and PropertyTax which are not deposited on accountof dispute which are as follows:
Name of the statute Nature of dues Period to Forum Amountwhich relates (Rs. in Crores)
Karnataka Forest Forest Aug'08 to Dy.Conservator of Forests, 18.96Tax Act,1963 development tax Mar'09 BellaryMadhya Pradesh Entry Tax 2001-02 Commissioner of Commercial 0.01Entry Tax Act Taxes (Appeal), Raipur.Chhattisgarh Sales Sales Tax 2002-03 Commissioner of Commercial 0.23Tax Act,1994 Taxes (Appeals), Raipur.Chhattisgarh Entry Entry Tax 2003-04 Dy.Commissioner of Commercial 1.58Tax Act Taxes (Appeal), Raipur.Nagar Palika, Property tax 2008-09 Nagar Palika, Kirandul 0.05KirandulNagar Palika, Export tax 1995-96 to High Court, Chhattisgarh 10.53Kirandul 2003-04Nagar Palika, Conservancy 1997-98 to High Court, Chhattisgarh 0.39Kirandul tax 2005-06Nagarpalika, Export Tax May 2001 to High Court of Chhattisgarh 0.26Bade Bacheli July 2002Madhya Pradesh Entry Tax 2000-01 Dy.Commissioner of Commercial 0.01Commercial Tax Tax (Appeal), SagarAct, 1994The Andhra Pradesh Tax on REP 1991-92 to Commercial Tax Officer & Sales 0.93General Sales tax licenses 92-93 Tax Appellate Tribunal,Act, 1957 HyderabadKarnataka Sales Tax on REP 1991-92 to Deputy Commissioner of 0.40tax Act, 1957 licenses 92-93 Commercial Taxes, BellaryKarnataka Motor Road tax on 2003-04 Regional transport officer, 1.15Vehicle taxation dumpers HospetAct 1957MMDR Act Royalty SEP-1977 to Madhya Pradesh State Govt. 0.89
AUG-2005HMC Act, 1955 Property tax on 1999-2000 to High court of Andhra Pradesh 0.08
vacant land 2000-01HMC Act, 1955 Property tax on Oct'07 to Municipal Corporation 0.02
V floor of Khanij Mar'09 of HyderabadBhavan Building
MP Commercial Commercial Tax 1997-98 Dy.Commissioner of Commercial 0.01Tax Act, 1994 2001-02 Tax (Appeal), Sagar
2003-04
NMDC Limited
46
(ix) In our opinion, the company has noaccumulated losses as at 31.03.2009 and
it has not incurred any cash losses in thefinancial year ended on that date or in the
immediately preceding financial year.
(x) In our opinion and according to theinformation and explanation given to us, the
company has not taken any loans fromfinancial Inst i tut ion, Bank and has not
issued any debentures. Therefore, the
provisions of clause 4(xi) of the Companies(Auditor's Report) Order, 2003 are not
applicable to the company.
(xi) In our opinion and according to the
information and explanation given to us, the
company has not granted loans andadvances on the basis of security by way
of pledge of shares, debentures and othersecurities. Accordingly the provisions of
clause 4(xii) of the Companies (Auditor's
Report) Order, 2003 are not applicable tothe company.
(xii) In our opinion, the company is not a chitfund or a nidhi / mutual benefit fund/society.
Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor's Report) Order,2003 are not applicable to the company.
(xiii) In our opinion, the company is not dealingin or trading in shares, securi t ies,
debentures and other investments.
Accordingly, the provisions of clause 4(xiv)of the Companies (Auditor's Report) Order,
2003 are not applicable to the company.
(xiv) According to the information and
explanations given to us, the company has
not given any guarantees for loans taken byothers from banks or financial institutions.
(xvi) According to the information andexplanations given to us, the company has
not obtained any term loans. Therefore, theprovisions of clause 4 (xvi) of the
Companies (Auditor's Report) Order, 2003
are not applicable to the company.
(xvii) According to the information andexplanations given to us and on an overall
examination of the balance sheet of thecompany, we report that the no funds raised
on a short-term basis have been used for
long-term investments.
(xviii) According to the information and
explanation given to us, the company hasnot made preferential allotment of shares
to parties and companies covered in the
register maintained under Section 301 ofThe Act. Accordingly, the provisions of
clause 4(xviii) of the Companies (Auditor'sReport) Order, 2003 are not applicable to
the company.
(xix) According to the information andexplanation given to us, the company has
not issued any debentures. Therefore, theprovisions of clause 4(xix) of the Companies
(Auditor's Report) Order, 2003 are not
applicable to the company.
(xx) According to the information and
explanation given to us, the company hasnot raised any money by public issues
during the year. Accordingly, the provisions
of clause 4(xx) of the Companies (Auditor'sReport) Order, 2003 are not applicable to
the company.
(xxi) According to the information and
explanations given to us, no fraud on or by
the company has been noticed or reportedduring the course of our audit.
For RAMAMOORTHY (N) & Co.,Chartered Accountant
(CA Surendranath Bharathi)Partner
Membership No.23837
Place : New DelhiDate : 29-May-2009
NMDC Limited
47
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4)OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF NMDC LIMITED, HYDERABAD FOR THEYEAR ENDED 31 MARCH 2009.
The preparation of financial statements of NMDC Limited, Hyderabad for the year ended 31 March 2009 in
accordance with the financial reporting framework prescribed under the Companies Act, 1956 is the
responsibility of the management of the Company. The statutory auditor appointed by the Comptroller and
Auditor General of India under Section 619(2) of the Companies Act, 1956 is responsible for expressing
opinion on these financial statements under Section 227 of the Companies Act, 1956 based on the
independent audit in accordance with the auditing and assurance standards prescribed by their professional
body, the Institute of Chartered Accountants of India. This is stated to have been done by them vide their
Audit Report dated 29 May 2009.
I on the behalf of the Comptroller and Auditor General of India have conducted a supplementary audit under
Section 619(3)(b) of the Companies Act, 1956 of the financial statements of NMDC Limited, Hyderabad for
the year ended on 31 March 2009. This supplementary audit has been carried out independently without
access to the working papers of the statutory auditor and is limited primarily to inquiries of the statutory
auditor and company personnel and a selective examination of some of the accounting records. On the basis
of my audit, nothing significant has come to my knowledge, which would give rise to any comment upon
or supplement to the Statutory Auditor’s Report under Section 619(4) of the Companies Act, 1956.
For and on the behalf ofthe Comptroller and Auditor General of India
(Roy Mathrani)Principal Director of Commercial Audit
Place : Hyderabad & Ex-Officio Member, Audit Board,Date : 11 June 2009 Hyderabad
NMDC Limited
48
Significant Accounting PoliciesA. BASIS OF ACCOUNTING
The Company prepares i ts f inancialstatements as a going concern, underhistorical cost convention and on accrualbasis, in accordance with the general lyaccepted accounting principles.
B. BALANCE SHEET
1. FIXED ASSETS:
1.1 Fixed Assets are stated at historical cost.
1.2 Assets acquired / constructed by the Companywith the subsidy sanctioned by Iron Ore MinesLabour Welfare Cess Fund are capitalised tothe extent of cost to the company. However, thework-in-progress and the subsidy thereon areshown separately till capitalisation.
1.3 The f ixed assets acquired against Govt.Grants are shown in the Balance Sheet afterdeducting the grant received. However, wherethe grant received is equal to the cost of theasset, such asset is shown at a nominal valueof Re.1/- per asset.
1.4 The Insurance Spares which can only be usedin connection with an item of Fixed Asset andwhose use is expected to be irregular, arecapitalised and depreciated from the date ofacquisition over the balance useful life of therespective assets.
2. DEPRECIATION:
2.1 Depreciat ion is charged on straight- l inemethod based on the l i fe of the assetsdetermined by technical assessment. Therates are equal to or higher than thoseprescribed in Schedule-XIV to the CompaniesAct, 1956. In the case of assets acquiredbefore 01.04.1987 depreciation is continuedto be provided at the rates based on the livesadopted earlier.
2.2 Depreciation is charged on pro-rata monthlybasis on addit ions / disposals of assetsduring the year taking the first day of themonth for acquisition / commissioning andthe last day of the month for disposals.
2.3 In respect of additions forming an integral partof an existing asset, depreciation is chargedover the remaining useful life of the asset. Incase the asset is already fully depreciated,such additions are depreciated in full.
2.4 Cost of leasehold land is amortized over theperiod of lease.
2.5 The l i fe of the assets constructed onleasehold land is restr icted to the leaseperiod except in case of mining projects.
3 EXPENDITURE DURING CONSTRUCTION:
3.1 Development expenses (pre-constructionperiod expenses) and Expenses on removalof overburden and preparation of miningbenches are amort ized in ten annualinstalments from the date of commencementof production.
3.2 Expenditure incurred on supervision duringthe construction period in respect of projectsfor expansion of existing facilities or creationof new facilities are treated as period costsand charged to revenue. Further, al ladministrative expenses incurred during theperiod of delay in the construct ion andcommissioning of facilities beyond the periodcontemplated by Detailed Project Report aresimilarly treated as revenue and charged tothe Profit & Loss Account.
3.3 In respect of those projects under constructionnecessitat ing select ion of a dif ferenttechnology than originally envisaged, for thereasons beyond the control of themanagement, the cumulative administrativeexpenses incurred on such projects having noother useful purpose t i l l the date of thedecision to go in for the new technology arecharged to the profit and loss account for theyear during which the relevant decision istaken. Further, all administrative expensesincurred on such projects subsequently till thenew technology is identified are also treatedas revenue and charged to the profit and lossaccount of the year in which they are incurred.
NMDC Limited
49
3.4 In the case of projects abandoned in the mid way due to unforeseen circumstances beyond the controlof the management, the cumulative administrative expenditure incurred on such projects up to thedate of abandonment are charged to the profit and loss account during the year of abandonment.
4 INVESTMENTS:
Long-term investments are stated at cost. A provision for diminution is made to recognise the declinein value, other than temporary, on an individual investment basis.
5 INVENTORIES:
Items of inventories as certified by the Management are valued on the basis mentioned below:
5.1 Finished Goods : At cost OR Net Realisable value whichever islower.
5.2 Work-in-process : At cost OR Net Realisable value whichever islower.
5.3 Work in process-Consultancy Contract job : At cost
5.4 Stores & Spares : At cost on weighted average method. However,Stationery, Medical, Canteen, School stores,Cotton Waste, Hospital stores and lab stores(excluding for R & D Lab): charged off toRevenue on procurement.
5.5 Stores & spares not moved for 5 yearsand above and identified as obsoleteby technical assessment : At Re.1 per unit.
5.6 Stores-in-Transit : At cost.
5.7 Loose Tools & Implements : At cost on weighted average method.
5.8 No credit is taken in the Accounts in respect of :
5.8.1 Stock of run of mine ore, embedded ore, low grade ore of Kumaraswamy Mine and slimes in caseof Iron Ore.
5.8.2 Stock of run of mine ore generated during construction period pending assessment of quality andsaleability.
5.8.3 Partly used stores and spares kept in stores.
5.8.4 Surplus/Obsolete stores and spares determined and not disposed of.
6. FOREIGN CURRENCY TRANSACTIONS:
6.1 Foreign Currency Transactions are accounted for at the exchange rates prevailing on the date oftransactions.
6.2 Fixed Assets are translated at the exchange rates on the date of transaction. The exchange differencein each financial year, up to the period of settlement is taken to profit & loss account.
NMDC Limited
50
6.3 The monetary items in foreign currencies aretranslated at the closing exchange rate on thedate of balance sheet and gains / lossesthereon adjusted in the Profit & Loss Account.
7. GRANT-IN-AID:
7.1 The grant-in-aid received from Government ofIndia for feasibi l i ty studies and theexpenditure incurred thereon are shownseparately until the feasibility expenditure isadjusted against the grant on fruit ion orabandonment of the feasibility study.
7.2 The grant-in-aid received from Government ofIndia in respect of Research & Developmentis shown after adjusting the amounts utilised.
C. PROFIT & LOSS ACCOUNT
1. REVENUE RECOGNITION:
1.1 Export sales: Export sales are recognized onthe date of Bil l of Lading. However, f inaladjustments are made in the year of receiptof discharge port analysis.
1.2 Domestic sales: Domestic sales areaccounted on the date of Railway receipt /Lorry receipt / Delivery challan.
1.3 Obsolete Stores & Scrap: Income isaccounted on realization basis in respect ofUsed / surplus/obsolete/unserviceablematerials and scrap.
2. EMPLOYEES BENEFITS:
2.1 Payments under Employees' Family BenefitScheme: Under the NMDC Employees' familybenefit scheme, monthly payments are madetill the normal date of retirement to the familymembers of those employees who aredischarged from service due to medicalreasons or death, on deposit of the amountenvisaged in the scheme and liability for thepayments are accounted for on the basis ofactuarial valuation.
2.2 Leave Travel Concession: (Encashment /Availment): Liability towards encashment /availment of Leave Travel Concession isaccounted for on the basis of actuarialvaluation.
2.3 Gratuity: Gratuity payable to el igibleemployees is administered by a separateTrust, which has taken a Group gratuity policywith LIC. Demands made by the Trustincluding the annual contribution and riskpremium for the future service gratuity of theLIC pol icy are charged to Profi t & LossAccount.
2.4 Accrued Leave Salary: Liabil i ty towardsAccrued Leave Salary, as at the end of the yearis recognized on the basis of actuarialvaluation and remitted to a fund maintainedby LIC.
2.5 Other Benefits: Liability towards Long serviceaward, Sett lement Al lowance and PostRetirement Medical Facilities to employees asat the end of the year is recognized on thebasis of actuarial valuation. The l iabi l i tytowards Settlement Allowance is remitted to afund maintained by LIC.
3. GENERAL:
3.1 Research & Development Expenditure: Theexpenditure on Fixed Assets relat ing toResearch & Development is capitalized anddepreciated in the same method as any otherassets of the Company. Other Research &Development expenditure of revenue natureincurred during the year is charged of to Profit& Loss Account.
3.2 Mine Closure Obligation: The liability to meetthe obligation of mine closure and restorationof environment as per Mines & Minerals(Development and Regulat ion) Act 1957(MMDR 1957) at the time of closure of themine has been estimated on the basis oftechnical assessment and charged to Profit &Loss account on the basis of Run of Mine oreproduction of the mine. The liability is remittedto a Fund maintained by LIC.
3.3 Pre-paid Expenses: Expenses are accountedunder prepaid expenses only where theamounts relating to unexpired period exceedRs.2,00,000/- in each case.
NMDC Limited
51
3.4 Prior period adjustments: Income/Expenditure relating to prior period of over Rs 2,00,000/- in eachcase arising out of errors and omissions are accounted as prior period adjustments.
3.5 Insurance Claims: Insurance claims are accounted as under:
In case of transit insurance-on the basis of claim lodged with the Insurance company.
In case of other Insurance - on the basis of Survey reports received.
Differences between insurance claims accounted for and actual receipt are accounted as MiscellaneousExpenditure / Income in the year of settlement.
Subject to our Report of even date For and on behalf of the Board
For RAMAMOORTHY (N) & CO,Chartered Accountants
(CA SURENDRANATH BHARATHI) (KR VENKATESWARLU) (RANA SOM)Partner Director (Finance) Chairman-cum-Managing DirectorMembership No. 23837
(KUMAR RAGHAVAN)Company Secretary
Place : New DelhiDate : 29-May-2009
NMDC Limited
52
(Rs. in Crore)
Schedule As at 31st As at 31stMarch, 2009 March, 2008
SOURCES OF FUNDS
Shareholders' Funds:
Share Capital 1 396.47 132.16
Reserves & Surplus 2 11,240.44 8,157.49
11,636.91 8,289.65
Grants-in-aid 3 – –
Deferred Tax Liability 58.04 6.01
TOTAL 11,694.95 8,295.66
APPLICATION OF FUNDS
Fixed Assets:Gross Block 4 1,669.17 1,421.40
Less : Depreciation 922.54 853.34
Net Block 746.63 568.06
Capital Work in Progress 5 248.31 111.83
994.94 679.89
Investments 6 71.54 83.28
Current Assets, Loans & Advances :Inventories 7 302.46 166.14
Sundry Debtors 8 1,027.24 487.71
Cash & Bank Balances 9 9,739.65 7,198.80
Other Current Assets 10 298.35 186.26
Loans & Advances 11 403.32 243.79
11,771.02 8,282.70
Less : Current Liabilities & Provisions :Current Liabilities 12 484.58 418.44
Provisions 13 680.17 356.32
1,164.75 774.76
Net Current Assets 10,606.27 7,507.94
Miscellaneous Expenditure 14 22.20 24.55(to the extent not written off or adjusted)
TOTAL 11,694.95 8,295.66
Subject to our Report of even date Accounting Policies and Schedules 1 to 24 form part of accounts.
For RAMAMOORTHY (N) & Co., For and on behalf of the BoardChartered Accountants
(CA SURENDRANATH BHARATHI) (KR VENKATESWARLU) (RANA SOM)Partner Director (Finance) Chairman-cum-Managing DirectorMembership No. 23837
Place : New Delhi (KUMAR RAGHAVAN)Date : 29.05.2009 Company Secretary
Balance Sheet as at 31st March, 2009
NMDC Limited
53
Profit & Loss Account for the year ended 31st March, 2009(Rs. in Crore)
Schedule For the Year ended For the Year ended31st March, 2009 31st March, 2008
INCOME:Sales 7,559.19 5,709.16Income from Services 2.62 2.15Income from sale of power 2.22 –Other Income 15 884.04 670.53Accretion / (Decretion) to stock 16 127.39 30.17TOTAL 8,575.46 6,412.01EXPENDITURE:Raising & Transportation charges 44.33 25.38Consumption of Stores & Spares 213.52 175.33Power, Electricity and Water 17 42.21 47.40Payments & Benefits to employees 18 421.10 355.62Repairs & Maintenance 19 51.64 39.43Royalty & Cess 62.79 54.36Selling Expenses - Freight Outwards 650.23 316.07
- Others 203.95 202.49854.18 518.56
Other Expenses 20 166.55 191.49Depreciation 73.56 60.00Miscellaneous/Promotional/Deferred 3.46 3.46Revenue Expenditure written offGross Expenditure 1,933.34 1,471.03Less : Transfer to Capital Accounts 21 5.59 6.27Net Expenditure 1,927.75 1,464.76Profit before prior Year items 6,647.71 4,947.25Add/(Less) prior Year items 22 0.52 0.22Profit before taxes 6,648.23 4,947.47Less : Provision - Taxation-Current Year 2,238.00 1701.00
- Earlier Years (Net) -18.70 11.27- Interest on Income Tax -6.65 -0.99
TOTAL (a) 2,212.65 1711.28Fringe Benefit Tax - Current Year 6.25 6.00
- Earlier Years (Net of interest) 4.92 -0.20TOTAL (b) 11.17 5.80TOTAL (a+b) 2,223.82 1,717.08Add : Deferred Tax adjustment for the year -52.03 20.59Profit after taxes 4,372.38 3,250.98Profit brought forward from previous Year 1.65 1.93Profit available for Appropriations 4,374.03 3,252.91Less : Appropriations:Interim Dividend 408.36 437.44Tax on Interim Dividend 69.40 74.34Proposed Dividend (Final) 467.84 214.09Tax on final Dividend 79.51 36.39General Reserve 3,348.00 2489.00
4,373.11 3,251.26Balance carried over to Balance Sheet 0.92 1.65Detailed Information 23Notes forming part of Accounts 24Earnings per Share (Basic & Diluted) Rs. 11.03 8.20Subject to our Report of even date Accounting Policies and Schedules 1 to 24 form part of accounts.
For RAMAMOORTHY (N) & Co., For and on behalf of the BoardChartered Accountants
(CA.SURENDRANATH BHARATHI) (KR VENKATESWARLU) (RANA SOM)Partner Director (Finance) Chairman-cum-Managing DirectorMembership No. 23837
Place : New Delhi (KUMAR RAGHAVAN)Date : 29.05.2009 Company Secretary
NMDC Limited
54
Schedule - 1 : Share Capital(Rs. in Crore)
As at 31st As at 31stMarch, 2009 March, 2008
Authorised:4,00,00,00,000 Equity Shares (Previous year15,00,00,000) of Rs.1/- each(Previous year Rs.10/- each) 400.00 150.00
Issued, Subscribed & Paid up:3,96,47,16,000 Equity Shares of Rs.1/- each fully 396.47 132.16paid up (Previous year 13,21,57,200 of Rs.10/- eachfully paid) includes 2,55,00,000 shares of Rs.1/ eachalloted for consideration other than cash(Previous year 25,50,000 shares of Rs.10/- each)and 2,64,31,44,000 shares of Rs.1/- each(Previous year NIL) alloted as bonus shares.
TOTAL 396.47 132.16
Schedule - 2 : Reserves and Surplus(Rs. in Crore)
As at 31st As at 31stMarch, 2009 March, 2008
a) General Reserve:As per last Balance Sheet 8,155.84 5,666.84Less : Utilised for Bonus issue -264.32 0.00Additions during the Year 3,348.00 2,489.00
11,239.52 8,155.84b) Profit & Loss Account - Surplus 0.92 1.65
TOTAL 11,240.44 8,157.49
Schedule - 3 : Grants-in-aid(Rs. in Crore)
As at 31st As at 31stMarch, 2009 March, 2008
For Research & Development 7.03 7.03Less : Amount Utilised 7.03 7.03
Note : An amount of Rs.881/- (Previous year Rs.881) 0.00 0.00is lying unutilised.
TOTAL 0.00 0.00
Schedules
NMDC Limited
55
(Rs. in Crore)
ASSETS GROSS BLOCK
As at 1st Additions Ded/Adj. As at 31stApril, 2008 during during March, 2009
the year the year
A. Plant, Mines & OthersLand - Free hold 9.16 0.43 0.00 9.59Land - Lease hold 85.87 47.68 0.00 133.55Roads, bridges etc. 13.94 0.92 0.00 14.86Buildings 44.68 3.07 0.00 47.75Dams, Wells & Pools 11.83 0.00 0.00 11.83Adit & tunnel 3.71 0.00 0.00 3.71Railway sidings 19.17 0.00 0.00 19.17Plant & Machinery 601.43 73.12 -0.21 674.76Heavy Mobile Equiptment 410.27 104.34 4.27 510.34Furniture & fittings 5.44 0.66 0.04 6.06Vehicles 18.86 4.03 0.01 22.88Locomotives 7.21 0.00 0.00 7.21Electrical Installations 45.60 4.52 0.00 50.12Sanitary & W. S. Installations 14.12 0.36 0.00 14.48Other assets 25.63 4.80 0.46 29.97Intangible Asset - Computer software 2.58 0.36 0.00 2.94
TOTAL 'A' 1,319.50 244.29 4.57 1,559.22
Figures for the previous year 1,206.92 119.54 6.96 1,319.50
B. Social FacilitiesLand - Free hold 2.62 0.00 0.00 2.62Land - Lease hold 0.02 0.00 0.00 0.02Roads, bridges etc. 5.22 1.64 0.00 6.86Buildings 63.50 3.51 0.01 67.00Cess fund quarters 12.57 0.00 0.00 12.57Dams, Wells & Pools 0.23 0.00 0.00 0.23Plant & Machinery 0.01 0.00 0.00 0.01Furniture & fittings 1.25 0.17 0.00 1.42Vehicles 2.37 1.65 -0.03 4.05Cess Fund Vehicles 0.00 0.00 0.00 0.00Electrical Installations 1.83 0.33 0.00 2.16Sanitary & W.S. Installations 6.39 0.00 0.00 6.39Other assets 5.79 0.74 0.01 6.52Cess fund other assets 0.10 0.00 0.00 0.10
TOTAL 'B' 101.90 8.04 -0.01 109.95
Figures for the previous year 97.23 5.08 0.41 101.90
TOTAL 'A + B' 1,421.40 252.33 4.56 1,669.17
Figures for the previous year 1,304.15 124.62 7.37 1,421.40
Schedule - 4 : Fixed Assets
NMDC Limited
56
Schedule - 4 : Fixed Assets (Contd..)(Rs. in Crore)
ASSETS DEPRECIATION NET BLOCK
Upto For Asset Prior Dedu- Upto As at As at31st the impair- period ctions/ 31st 31st 31st
March, year ment adjust- adjust- March, March, March200 8 ments ments 200 9 200 9 200 8
A. Plant, Mines & OthersLand - Free hold 0.00 0.00 0.00 0.00 0.00 0.00 9.59 9.16Land - Lease hold 38.82 5.62 0.00 0.00 0.00 44.44 89.11 47.05Roads, bridges etc. 9.94 0.26 0.00 0.00 0.00 10.20 4.66 4.00Buildings 17.07 1.61 0.00 0.00 0.00 18.68 29.07 27.61Dams, Wells & Pools 11.42 0.03 0.00 0.00 0.00 11.45 0.38 0.41Adit & tunnel 3.71 0.00 0.00 0.00 0.00 3.71 0.00 0.00Railway sidings 8.56 0.76 0.00 0.00 0.00 9.32 9.85 10.61Plant & Machinery 409.38 21.16 -0.50 0.00 -0.30 430.34 244.42 192.05Heavy Mobile Equiptment 234.53 30.28 1.69 0.00 4.18 262.32 248.02 175.74Furniture & fittings 3.98 0.41 0.00 0.00 0.03 4.36 1.70 1.46Vehicles 11.10 2.17 0.00 0.00 0.03 13.24 9.64 7.76Locomotives 7.21 0.00 0.00 0.00 0.00 7.21 0.00 0.00Electrical Installations 28.67 3.44 0.01 0.00 0.04 32.08 18.04 16.93Sanitary & W.S. Installations 8.62 0.53 0.00 0.00 0.00 9.15 5.33 5.50Other assets 17.73 2.22 -0.03 0.00 0.37 19.55 10.42 7.90Intangible Asset- Computer software 1.81 0.52 0.00 0.00 0.00 2.33 0.61 0.77
TOTAL 'A' 812.55 69.01 1.17 0.00 4.35 878.38 680.84 506.95
Figures for the previous year 760.92 58.81 -1.59 -0.03 5.56 812.55 506.95 446.00
B. Social FacilitiesLand - Free hold 0.00 0.00 0.00 0.00 0.00 0.00 2.62 2.62
Land - Lease hold 0.02 0.00 0.00 0.00 0.00 0.02 0.00 0.00
Roads, bridges etc. 2.38 0.18 0.00 0.00 0.00 2.56 4.30 2.84
Buildings 22.33 1.82 0.00 0.00 0.01 24.14 42.86 41.17
Cess fund quarters 4.21 0.25 0.00 0.00 0.00 4.46 8.11 8.36
Dams, Wells & Pools 0.15 0.00 0.00 0.00 0.00 0.15 0.08 0.08
Plant & Machinery 0.01 0.00 0.00 0.00 0.00 0.01 0.00 0.00
Furniture & fittings 1.11 0.12 0.00 0.00 0.01 1.22 0.20 0.14
Vehicles 1.56 0.29 0.00 0.00 -0.03 1.88 2.17 0.81
Cess Fund Vehicles 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Electrical Installations 1.40 0.08 0.00 0.00 0.00 1.48 0.68 0.43
Sanitary & W.S. Installations 4.04 0.24 0.00 0.00 0.00 4.28 2.11 2.35
Other assets 3.48 0.40 0.00 0.00 0.02 3.86 2.66 2.31
Cess fund other assets 0.10 0.00 0.00 0.00 0.00 0.10 0.00 0.00
TOTAL 'B' 40.79 3.38 0.00 0.00 0.01 44.16 65.79 61.11
Figures for the previous year 38.33 2.77 0.01 0.00 0.32 40.79 61.11 58.90
TOTAL 'A + B' 853.34 72.39 1.17 0.00 4.36 922.54 746.63 568.06
Figures for the previous year 799.25 61.58 -1.58 -0.03 5.88 853.34 568.06 504.90
NMDC Limited
57
Schedule - 4 : Fixed Assets (Contd..)Notes:
1. Roads, Bridges etc., constructed by the Company and handed over to Chhattisgarh State Governmentfor maintenance are discontinued to be shown in the books of account on being fully depreciated.
2. Capital Expenditure not represented by assets and written off over a period of five years:
(Rupees in crore)
Unit Gross Block Depreciation Net Block
Roads & Bridges Lalapur 0.74 0.74 0(0.74) (0.74) (0)
Electrical Installations Lalapur 0.90 0.90 0(0.90) (0.90) (0)
Vizag 0.36 0.36 0(0.36) (0.36) (0.00)
Jagdalpur 0.91 0.91 0(0.91) (0.74) (0.17)
Vehicles Bld-5 0.16 0.11 0.05(0.16) (0.08) (0.08)
3. Assets valuing Rs. 5.09 crores (previous year Rs.5.09 crore) acquired wholly out of Grant-in-aid fromGovernment of India are included in the Schedule as per Accounting Policy No. B.1.3. The detailsof original value of such assets are as under.
(Rupees in Crore)
Category Original value
Land 0.02
Roads & Bridges 0.01
Buildings 0.57
Sanitary & water supply 0.05
Plant & Machinery 4.04
Furniture 0.02
Electrical Installations 0.27
Other Assets 0.11
TOTAL 5.09
NMDC Limited
58
Particulars of assets relating to Steel Development Fund / Govt. Grant:
(Rs. in crore)
Plant & Machinery
Cost as at 31.03.2009 0.66(0.66)
Less : Grant 0.17(0.17)
Amount Capitalised 0.49(0.49)
4. Intangible assets: Computer software is capitalized and amortised over a period of three years.
5. Rates of Depreciation could not be specified in view of Accounting Policy No.B.2.1.
6. The value of lease hold land measuring 3021.35 Sq. Mts and 24719.49 Sq. Mts. (previous year3021.35 Sq. Mts. and 24719.49 Sq. Mts.) taken from Vizag Port Trust Authorities for construction ofRegional office buildings and Screening Plant respectively has not been brought into books as theexact amount payable to the lessor during the lease period of land is not ascertainable under the termsof lease agreement. However, the yearly rent payable in this regard is charged off in the accounts.
Depreciation in respect of Roads, Buildings, Culverts, Bridges, Plant & Machinery and ElectricalInstallations constructed on the land referred to above has been provided, restricting the life to thelease period.
7. The value of land of 114.01 hectares taken over from District Industries Centre, Jagdalpur for constructionof Romelt Steel Plant near Nagarnar has not been brought into the books as the amount payable isnot ascertainable in the absence of any demand from the concerned authorities.
8. Particulars of assets relating to Cess Fund Assets/Grant:
(Rs. in crore)
Quarters Vehicles Sanitary & OtherWater Supply Assets
Installations
Cost as at 31.03.2009 15.90 0 2.18 0.58(15.90) (0.07) (2.18) (0.58)
Less : Cess Fund Grant 3.33 0 0.27 0.01(3.33) (0.01) (0.27) (0.01)
Amount Capitalised 12.57 0 1.91 0.57(12.57) (0.06) (1.91) (0.57)
9. The land on which Cess Fund Quarters were constructed prior to 1984-85 was leased out to CessFund Authorities.
10. The ownership of Cess Fund assets constructed prior to 1984-85 vests with the Cess Fund Authorities.However, as per agreement with Cess Fund Authorities, the quarters constructed after 1984-85 shallremain charged in their favour.
NMDC Limited
59
11. Formal agreements / Transfer deeds remain to be executed in respect of the following:
(a) Residential flats purchased at Mumbai have been registered in the name of the Company duringApril 2009.
(b) Renewal of Mining Leases at Deposit 10 (Float Ore) & Panna & Donimalai.
(c) Lease deeds in respect of parts of land for township at Bailadila-5, Bacheli and Bailadila-14,Kirandul.
(d) Lease deeds in respect of land for Screening Plant at Visakhapatnam.
(e) Mining lease to the extent of 22.00 hectares of Silica Sand Plant near Lalapur (Allahabad).
(f) Lease in respect of a portion of the land at R&D center measuring 7.0 acres has expired duringFeb 07 and process of renewal of the lease is under progress.
(g) Lease deed in respect of Wind Electrical Generators at Banjangondalhalli/Annehal in ChitradurgaDist, Karnataka.
12. Details of Assets retired from active use and held for disposal as on 31.03.2009:
(Rs. in crore)
Assets Gross Accumulated Net BlockBlock Depreciation
1. Heavy Mobile Equipments 22.62 22.62 0(14.88) (14.88) (0)
2. Vehicles 1.09 1.02 0.07(1.00) (0.95) (0.05)
3. Other Assets 0.02 0.02 0(0.26) (0.26) (0)
Note : Figures in brackets pertain to previous year.
NMDC Limited
60
(Rs. in Crore)
As at 31st As at 31stMarch, 2009 March, 2008
Construction work in progress 204.26 58.38
Less : Impairment 0.24 0.24
204.02 58.14
Construction Stores 2.60 2.25
Capital Assets in stores awaiting 12.69 26.10installation or in transit
Less : Impairment 0.04 0.00
12.65 26.10
Advances to suppliers/contractors 17.19 17.62for Capital Expenditure
Expenditure incidental to construction 11.85 7.72awaiting allocation
TOTAL 248.31 111.83
Notes:
Particulars of advances to suppliers/contractorsfor Capital Expenditure:
Advances considered good in respect of which:
i) the Company is fully secured 0.00 0.00
ii) the Company holds no security other than 17.19 17.62debtors personal security
Schedule - 5 : Capital Work in Progress
NMDC Limited
61
(Rs. in Crore)
As at 31st As at 31stMarch, 2009 March, 2008
In Trust Securities :
Non-trade & Quoted at cost:
6.75% Tax Free US 64 Bonds in Unit Trust of India 0.00 23.01
Current Year NIL (Previous year 23,00,944 of the
face value of Rs 100/- each)
In Shares:
Trade & Unquoted at cost:
i) 3,96,002 (previous Year 3,96,002) Equity 3.96 3.96
Shares of Rs.100 each fully paid up in
Subsidiary Company J&KMDC Ltd, Jammu
Less : Investment deration 3.96 3.96
0.00 0.00
ii) 41,85,590 (previous Year 41,85,590) Equity 7.20 7.20
shares of FMG 2500/- each fully paid up in
wholly owned Subsidiary Company
NMDC SARL, Madagaskar
Less : Investment deration 7.20 7.20
0.00 0.00
iii) 3,967(previous year 3,967) Equity shares 0.00 0.00
of N$ 1 each fully paid up in wholly owned
Subsidiary Company Nam-India Minerals
Development Corporation (Pty) Ltd, Namibia
Rs.24,311 (Previous year Rs. 24,311)
Less : Investment deration Rs.24,310 0.00 0.00
(previous year Rs. 24,310) 0.00 0.00
iv) 4,90,00,000 (previous year 4,90,00,000) 49.00 49.00
Equity shares of Rs.10 each fully paid up in
Nilachel Ispat Nigam Limited, Bhubaneswar
Schedule - 6 : Investments
NMDC Limited
62
(Rs. in Crore)
As at 31st As at 31stMarch, 2009 March, 2008
Schedule - 6 : Investments (Contd..)
v) 1,05,000 (previous year 1,05,000) Equity 0.11 0.11Shares of Rs.10/- each fully paid up inRomelt SAIL India Ltd, New Delhi
Less : Deration 0.11 0.11
0.00 0.00
vi) 7,65,000 (Previous Year NIL) Equity 0.77 0.00share of Rs.10/- each fully paid up inNMDC CMDC Ltd
Non-trade & Unquoted at cost:
i) 150 Shares (previous year 150 Shares) of 0.02 0.02Rs.1000 each fully paid up in Whole-saleConsumers Co-operative Stores, KirandulRs.1,50,000 (Previous year Rs.1,50,000)
ii) 500 Shares (previous year 500 Shares) of 0.00 0.00Rs.10 each fully paid up in NMDC EmployeesCo-operative Society Ltd, Bacheli Rs.5,000(previous year Rs.5,000)
iii) 25 Shares (previous year 25 Shares) of 0.00 0.00Rs.100 each fully paid up in NMDC EmployeesCo-operative Society Ltd, Donimalai Rs.2,500(previous year Rs.2,500)
iv) 500 Shares (previous year 500 shares) of 0.00 0.00Rs.100 each fully paid up in NMDC EmployeesCo-operative Society Ltd, Panna Rs. 50,000 0.02 0.02(previous year Rs.50,000)
Advance for Investment :
4 crore equity shares of Rs 10/- each inKrishnapatnam Railway Co. Ltd., partly paid,pending allotment. 21.75 11.25
TOTAL 71.54 83.28
Notes:
1. Aggregate amount of Quoted Investments Gross Rs.0 crore and Net Rs.0 crore (Previous year GrossRs. 23.01 crore and Net Rs. 23.01 crore).
2. Aggregate amount of Unquoted Investments Gross Rs.82.04 crore and Net Rs.71.54 crore (PreviousYear Gross Rs.71.54 crore and Net Rs.60.27 crore).
3. During the year the company has disposed off entire units of US-64 Bonds. (Previous Year NIL).
4. All the above are long term investments.
NMDC Limited
63
(Rs. in Crore)
As at 31st As at 31stMarch, 2009 March, 2008
Stores & Spares 81.53 72.64
Loose tools and Implements 0.25 0.21
81.78 72.85
Finished Goods:
Iron Ore 220.60 93.13
Silica sand 0.00 0.08
Ferric Oxide & Ferrite Powder 0.06 0.06
Ultra Pure Ferric Oxide 0.00 0.00Rs.57/- (previous year Rs 57/-)
Diamonds & Precious Stones 0.00 0.00
220.66 93.27
Work-in-Process :
Diamonds 0.02 0.02
TOTAL 302.46 166.14
Notes:
1. Stores and Spares include:
a) Stores-in-transit 16.81 16.15
b) Non moving stores & spares valued at 0.08 0.11
15% of their original value of Rs.0.53 crore(previous year Rs.0.73 crore)
c) Obsolete stores & spares valued at 0.02 0.01
Rs.1/- per unit of their original value ofRs.1.70 crore (previous year Rs.1.64 crore)
Schedule - 7 : Inventories(As Valued and Certified by the Management)
NMDC Limited
64
Schedule - 8 : Sundry Debtors(Rs. in Crore)
As at 31st As at 31stMarch, 2009 March, 2008
Debts outstanding for a period
exceeding six months 4.14 3.26
Other debts 1,024.55 486.51
1,028.69 489.77
Less : Provision for bad & doubtful debts 1.45 2.06
1,027.24 487.71
TOTAL 1,027.24 487.71
Notes:
1. Particulars of Sundry Debtors:
a) Debts considered good in respect of which:
i) the Company is fully secured 0.00 0.00
ii) the Company holds no security other 1,027.24 487.71than the debtor's personal security
b) Debts considered doubtful & provided for 1.45 2.06
NMDC Limited
65
Schedule - 9 : Cash and Bank Balances(Rs. in Crore)
As at 31st As at 31stMarch, 2009 March, 2008
Cash and Cheques on hand 1.23 34.57
Balances with :
(a) Scheduled Banks :
On Current Accounts 36.79 42.78
On Deposit Accounts (Rs.71 crore 9,701.40 7,121.15offered as security for BankGuarantees and Letters of Credit) 9,738.19 7,163.93(Previous Year Rs.15 crore)
(b) Other Banks on Current Accounts:
(i) Exim Bank (Tanzania) Ltd(Shillings Account) 0.01 0.04(Maximum balance duringthe year Rs.8,94,454/-)(Previous Year Rs.16,53,225/-)
(ii) National Micro Finance Bank(Shillings Account) 0.02 0.07(Maximum balance duringthe year Rs.9,51,418/-)(Previous Year Rs.8,60,633/-)
(iii) Exim Bank (Tanzania) Ltd.(US $ account) 0.20 0.19(Maximum balance duringthe year Rs.30,26,667/-) 0.23 0.30(Previous Year Rs. 1,25,51,604/-)
TOTAL 9,739.65 7,198.80
Schedule - 10 : Other Current Assets(Rs. in Crore)
As at 31st As at 31stMarch, 2009 March, 2008
Interest accrued on Investments 0.00 0.52
Accrued interest on deposits with banks 298.35 185.74
TOTAL 298.35 186.26
NMDC Limited
66
Schedule - 11 : Loans and Advances(Rs. in Crore)
As at 31st As at 31stMarch, 2009 March, 2008
Advances recoverable in cash or kind or 145.99 74.52for value to be received (include shortageof stores under investigation Rs.Nil(previous year Rs. 0.05 crore)
Less : Provision for bad & doubtful advances 0.29 0.31(include shortage of stores under investigationRs.Nil (previous year Rs. 0.05 crore)
145.70 74.21
Advance Income Tax & TDS 4,136.22 1,873.08
Less : Provision 3,959.39 1,746.74
176.83 126.34
Advance Fringe benefit tax 8.79 7.24
Less : Provision 6.29 6.03
2.50 1.21
Inter Corporate Loans to PSUs 4.50 4.50
Less : Loans deration 4.50 4.50
0.00 0.00
Balance with Customs, Port Trust etc. 5.84 1.13
Deposit with Others 72.55 41.00
Less : Provision 0.10 0.10
72.45 40.90
TOTAL 403.32 243.79
Notes:Particulars of Loans and advances:a) Considered good in respect of which:
i) the Company is fully secured 19.73 20.81ii) the Company holds no security other 383.59 222.98
than the debtors personal securityb) Considered doubtful and provided for 4.89 4.91c) Amount due by Directors/Officers:
i) Amount due 0.02 0.11ii) Maximum amount due at any time during year 0.03 0.16
d) Advances to Subsidiary Companies(b&c are wholly owned subsidiaries):i) Amount outstanding:
a) J&K MDC Limited, Jammu 0.00 0.00b) NMDC SARL, Madagaskar 0.00 0.00c) NAM India MDC, Namibia 0.00 0.00d) NMDC CMDC Ltd 0.04 0.00
ii) Maximum amount outstanding at any time during the yeara) J&K MDC Limited, Jammu 0.27 0.15b) NMDC SARL, Madagaskar 0.00 0.00c) NAM India MDC, Namibia 0.01 0.00d) NMDC CMDC Ltd 0.04 0.00
NMDC Limited
67
(Rs. in Crore)
As at 31st As at 31stMarch, 2009 March, 2008
Sundry Creditors :Outstanding dues of micro and small enterprises 0.11 0.00
Other than micro & small enterprises 383.17 228.70including Rs.NIL (Previous year Rs.Nil) 383.28 228.70payable to Subsidiary Companies)
Advances from Customers 31.39 124.82
Mine closure Liability 134.58 109.00
Less : Fund with LIC 128.51 105.32
6.07 3.68
Deposits from Suppliers, Contractors and Others 31.77 30.83
Less : Investments received as security Deposit 0.05 0.05
31.72 30.78
Sales Tax on REP Licences 2.38 2.38Less : Amount paid 1.00 1.00
1.38 1.38
Investor Education & Protection Fund not due :Unpaid Dividend 0.07 0.06
Other liabilities 30.67 29.02
TOTAL 484.58 418.44
Disclosure relating to Micro and Small Enterprises:i) a) The principal amount remaining unpaid
to the supplier as at the end of the year 0.11 NIL(b) The interest due on the above amount, remaining
unpaid to the supplier as at the end of the year NIL NILii) the amount of interest paid in terms of section 16,
along with the amount of the payment made to thesupplier beyond the appointed day during eachaccounting year; NIL NIL
iii) the amount of interest due and payable for the periodof delay in making payment (which have been paid butbeyond the appointed day during the year) but withoutadding the interest specified under Micro, Small andMedium Enterprises Development Act, 2006; NIL NIL
iv) the amount of interest accrued and remainingunpaid at the end of each accounting year; and NIL NIL
v) the amount of further interest remaining due andpayable even in the succeeding years, until suchdate when the interest dues as above are actuallypaid to the small enterprise, for the purpose ofdisallowance as a deductible expenditure undersection 23 of Micro, Small and Medium EnterprisesDevelopment Act, 2006. NIL NIL
Schedule - 12 : Current Liabilities
NMDC Limited
68
Schedule - 13 : Provisions(Rs. in Crore)
As at 31st As at 31stMarch, 2009 March, 2008
Proposed dividend 467.84 214.09
Tax on Proposed Dividend 79.51 36.39
547.35 250.48
Employee Benefits :
a. Gratuity 0.00 0.95
b. Accrued leave salary 49.03 38.71
Less : Fund with LIC 45.49 38.71
3.54 0.00
c. Settlement allowance 11.66 10.90
Less : Fund with LIC 11.66 10.90
0.00 0.00
d. Post Retirement Medical Benefits 105.50 74.96
e. Leave Travel Concession 5.32 10.69
f. Long service award 7.53 7.55
g. Employees Family Benefit Scheme 10.93 11.69
132.82 105.84
TOTAL 680.17 356.32
Details of Provisions (in compliance of AS-29):(Rs. in crore)
Opening Adjustment Addition ClosingBalance during year during year Balance
Proposed Dividend and Tax thereon 250.48 -728.25 1025.12 547.35(131.42) (-643.21) (762.27) (250.48)
Gratuity 0.95 -0.95 0.00 0.00(1.34) (-0.39) (0.00) (0.95)
Accrued Leave salary 38.71 -2.28 12.60 49.03(40.06) (-13.49) (12.14) (38.71)
Settlement Allowance 10.90 -0.17 0.93 11.66(11.58) (-1.55) (0.87) (10.90)
Post Retirement Medical benefits 74.96 -14.33 44.87 105.50(13.78) (-3.37) (64.55) (74.96)
Leave Travel concession 10.69 (5.37) 0.00 5.32(0.00) (0.00) (10.69) (10.69)
Long Service Awards 7.55 (0.02) 0.00 7.53(0.00) (0.00) (7.55) (7.55)
Family Benefit scheme 11.69 (0.76) 0.00 10.93(0.00) (0.00) (11.69) (11.69)
TOTAL 405.94 (752.13) 1083.52 737.33
Previous year (198.18) (-662.01) (869.76) (405.93)
Note : Figures in bracket indicate previous year figures
NMDC Limited
69
Schedule - 14 : Miscellaneous/Promotional & Deferred RevenueExpenditure (to the extent not written off or adjusted)
(Rs. in Crore)
As at 31st As at 31stMarch, 2009 March, 2008
Development Expenses 8.82 8.02
Others:
Expenses on removal of overburden 13.38 16.53and preparation of Mining Benches
TOTAL 22.20 24.55
Schedule - 15 : Other Income(Rs. in Crore)
For the Year ended For the Year ended31st March, 2009 31st March, 2008
Income on investments :
6.75% US 64 0.26 1.55
Interest on :
Deposits with Banks (Tax deducted 866.96 638.28at source Rs.197.50 crore,(Previous Year Rs. 143.21 crore)
Others (Tax deducted at source 1.83 5.92Rs.0.02 crore,(Previous year Rs. 0.49 crore)) 868.79 644.20
Profit on Sale of investments 0.00 2.60
Profit on sale of assets 0.01 0.64
Gain in Foreign Exchange variation 0.00 0.08
Miscellaneous Income 14.98 21.46
TOTAL 884.04 670.53
NMDC Limited
70
(Rs. in Crore)
For the Year ended For the Year ended31st March, 2009 31st March, 2008
Work-in-process:
Balance as at close of the Year 0.02 0.02
Less : Balance as at the beginning of the Year 0.02 0.03
0.00 -0.01
Finished Goods:
Balance as at close of the Year 220.66 93.27
Less : Balance as at the beginning of the Year 93.27 63.09
127.39 30.18
TOTAL 127.39 30.17
Schedule - 17 : Power, Electricity & Water(Rs. in Crore)
For the Year ended For the Year ended31st March, 2009 31st March, 2008
Power charges 33.83 35.65
Electricity charges 7.66 7.64
Water charges 0.72 4.11
TOTAL 42.21 47.40
Note:
The Power charges exclude the expenditureon internal generation of power accountedunder following primary heads of accounts:
a) Payments and benefits to employees 0.13 0.05
b) Consumption of Stores & spares 0.17 0.09
0.30 0.14
Schedule - 16 : Accretion / (Decretion) to Stock
NMDC Limited
71
(Rs. in Crore)
For the Year ended For the Year ended31st March, 2009 31st March, 2008
Salaries, Wages & Bonus 265.62 193.99
Contribution to Staff PF, EPS & DLI 20.28 17.41
Contribution to Group Gratuity Fund 53.15 1.01
Workmen and Staff Welfare Expenses 82.05 116.10
Transitional liability of AS-15(REV) 0.00 27.11
TOTAL 421.10 355.62
Schedule - 19 : Repairs & Maintenance(Rs. in Crore)
For the Year ended 31st March, 2009 For theYear ended
DESCRIPTION Buildings Plant & Vehicles Others Total 31stMachinery March, 2008
Gross Expenditure 23.23 149.34 5.76 30.16 208.49 189.92
Less :
Expenditure underprimary heads:
Payments & Benefitsto employees 5.80 41.21 4.78 0.03 51.82 69.55
Consumption of Stores 11.33 92.75 0.61 0.34 105.03 80.94
Sub Total 17.13 133.96 5.39 0.37 156.85 150.49
Net Expenditure 6.10 15.38 0.37 29.79 51.64 39.43
Schedule - 18 : Payments & Benefits to Employees
NMDC Limited
72
(Rs. in Crore)
For the Year ended For the Year ended31st March, 2009 31st March, 2008
Rent 1.13 1.10
Insurance 2.47 1.51
Rates & Taxes 4.74 4.20
Directors' Travelling expenses 1.48 1.16
Directors' Sitting fee 0.08 0.09
Payment to Auditors:
As Auditors:
Audit Fee 0.09 0.08
In other capacity 0.04 0.04
Out of pocket expenses 0.02 0.02
0.15 0.14
Loss on sale/adjustment of Assets 0.06 0.33
Miscellaneous losses written off 0.58 0.41
Provisions for :
Doubtful debts/advances etc. 0.13 1.35
Contingencies - Other losses 0.00 0.05
0.13 1.40
Mine closure Obligation 15.38 19.63
Entertainment 1.29 1.03
Donations 0.00 0.13
Sundries:
Travelling & Conveyance 17.63 16.10
Advertisement & Publicity 15.44 30.04
Postage, Telephone & Telex 2.11 1.75
Stationery & Printing 2.20 1.83
Consultancy charges 4.91 5.41
CISF/Security guards 30.33 26.86
Safety expenses 0.47 0.44
Corporate Social Responsibility 33.30 21.75
Loss in Exchange variation 0.97 0.00
Environmental Development 9.39 11.04
Golden Jubilee year award 0.00 25.00
Other expenses 22.31 20.14
139.06 160.36
TOTAL 166.55 191.49
Schedule - 20 : Other Expenses
NMDC Limited
73
Schedule - 21 : Expenditure Transferred to Capital Accounts(Rs. in Crore)
For the Year ended For the Year ended31st March, 2009 31st March, 2008
Amounts transferred to Capital Accountsas per details shown below (Net) : 5.59 6.27
Miscellaneous/ IncidentalDESCRIPTION Promotional Expenditure
Expenditure During Construction
March, March, March, March,2009 2008 2009 2008
Consumption of Stores & Spares – – 0.03 0.01
Power – – 0.39 –
Payments & Benefits to Employees – – 0.91 0.41
Repairs & Maintenance – – 0.16 0.02
Other Expenditure :
Consultancy 1.46 0.93 0.88 2.93
Environment – – 0.01 –
Sample Analysis – – 0.01 –
Others – 0.29 0.84 0.84
Depreciation – – 0.90 0.84
TOTAL 1.46 1.22 4.13 5.05
Less : Income – – – –
Net Expenditure 1.46 1.22 4.13 5.05
NMDC Limited
74
Schedule - 22 : Prior-Period Adjustments(Rs. in Crore)
For the Year ended For the Year ended31st March, 2009 31st March, 2008
Income Expenditure Income Expenditure
Royalty & Cess – – – 0.72
Consumption of stores & spares 0.13 – 0.39 –
Repairs & Maintenance 0.59 – 0.31 –
Other Income – – 0.17 –
Depreciation – – 0.03 –
Other Expenses 0.04 – 0.04 –
TOTAL 0.76 – 0.94 0.72
Net Income/(expenditure) 0.76 – 0.22 –
Less : Transfer to Expr.incidental to construction 0.24 – – –
Total transferred 0.24 – – –
Net Income/Expenditure 0.52 – 0.22 –
NMDC Limited
75
1. Particulars of Licenced Capacity, Installed Capacity :
Details Licenced Capacity Installed Capacity(As certified by the Management)
Iron Ore Not applicable 31 Million WMT of ROM(31 Million WMT of ROM)
Diamonds Not applicable 84,000 Carats(84,000 Carats)
Wind power Not applicable 10.5 MW(Nil)
Silica sand Not applicable 3.00 lakh tonnes of products(3.00 lakh tonnes of products)
Ultra Pure Ferric Oxide Not applicable 3,000 tonnes of products(3,000 tonnes of products)
2. Particulars of Opening Stock, Actual Production, Sales and Closing Stock :
Particulars Iron Ore Diamonds Silica Sand Wind Power
Quantity Value Quantity Value Quantity Value Value(lakh WMT) (Rs. Crore) (Carats) (Rs.Crore) (WMT) (Rs. Crore) (Rs. Crore)
1. Opening stockas on 01-04-2008 39.18 93.13 6.20 – 2,209 0.08 –
(20.05) (58.81) (2637.71) (4.05) (1,751) (0.06) (–)
2. Production 285.15 – – – – – –(298.16) – – – (2920) – –
3. Qty retrieved at Project 2.48 – – – – – –(4.59) (–) (–) (–) (–) (–) (–)
4. Qty retrieved at Port 0.38 – – – – – –(0.45) (–) (–) (–) (–) (–) (–)
5. Qty available for sale : (A) 327.19 – 6.20 – 2,209 – –
(323.25) (–) (2,637.71) (–) (4,671) (–) (–)
6. Sales 264.72 7,559.11 – – 1,966 0.08 2.22(281.84) (5705.32) (2,631.51) (3.75) (2462) (0.09) (–)
7. Loss in transit/handling 2.22 – – – 193 – –(2.23) (–) (–) (–) (–) (–) (–)
TOTAL - B 266.94 – – – 2,159 – –
(284.07) (–) (2,631.51) (–) (2,462) (–) (–)
8. Closing stock (A-B)as on 31-03-09 60.25 220.60 6.20 – 50 – –
(39.18) (93.13) (6.20) (–) (2,209) (0.08) (–)
Schedule - 23 : Detailed Information
NMDC Limited
76
Schedule - 23 : Detailed Information (Contd..)The following details are further disclosed :
1. There was an opening and closing stock of 57 mt of Ultra pure ferric oxide, valuing Rs NIL, with noproduction and sales during the year.
(Previous year : the opening and closing stock was 57 mt valuing Rs NIL).
2. The Opening and Closing stock of 26.744 mt of ferrite powder, valuing Rs 0.06 crore with no productionand sales during the year.
(Previous year : the opening and closing stock of ferrite powder - 26.744 mt, valuing Rs 0.17 croreand Rs 0.06 crore respectively).
3. The value of services rendered during the year Rs. 2.62 crore. (Previous year Rs.2.15 crore)
Details of Sales: (Iron Ore)
Quantity Value(Lakh WMT) (Rs. Crore)
Export through MMTC 38.74 1,710.01(37.78) (875.28)
Domestic Sales 225.98 5,849.10(244.06) (4,830.04)
TOTAL 264.72 7,559.11(281.84) (5,705.32)
Notes :
1. Figures in brackets pertain to previous Year.
2. Iron ore production at Sl No 2 above excludes Low grade f ine ore at Kumaraswamy mine3.32 lakh wmt. (Previous year 0.93 lakh WMT).
3. The closing stock of iron ore is exclusive of 0.06 lakh WMT valuing Rs. 25.05 lakhs taken fromM/s MMTC on loan account. (Previous year stock is exclusive of 0.30 lakh WMT, valuing Rs.3.09 croretaken from MMTC on loan account).
4. The stock of diamonds of 6.2 (previous year 6.2) carats is under judicial custody.
5. The following quantity of iron ore is not considered in stock as per the policy of the Company :
a. Embedded Fine ore lying in dumps prior to 01/04/2007 : 8.78 lakh WMT (previous year8.78 lakh WMT).
b. Desilted slimes stacked at various locations 16.46 lakh WMT (previous year 20.77 lakh WMT).
c. Stocks of LG Fines at Kumaraswamy 9.16 lakh WMT (previous year 5.84 lakh WMT).
NMDC Limited
77
(Rs. in Crore)
For the Year ended For the Year ended31st March, 2009 31st March, 2008
3. Particulars of Directors’ Remuneration:
(including Chairman & Managing Director)
a) Salaries 0.70 0.31
b) Contribution to PF, FPS & DLI 0.05 0.06
c) Contribution to Gratuity 0.20 –
d) Medical reimbursement 0.03 0.04
e) House Rent 0.11 0.09
f) LTC 0.03 0.01
g) Others 0.01 –
1.13 0.51
4. Value of imports calculated on CIF basis:
i. Components & Spare parts 23.21 9.04
ii. Capital Goods 0.81 6.23
5. Expenditure in foreign currency:
i. Consultancy charges 0.21 0.34
ii. Others 1.74 5.11
6. Particulars of consumption of raw material & Stores & spares:
Components & spare parts Value Percentage Value Percentage
(including consumable stores)
a) Imported 11.86 5.55 8.96 5.11
b) Indigenous 201.66 94.45 166.37 94.89
213.52 100.00 175.33 100.00
7. Foreign Exchange earnings :
(on realisation basis)
a) Export of Iron Ore (Direct) – –
b) despatch money – –
c) Consultancy 0.08 –
Schedule - 23 : Detailed Information (Contd..)
NMDC Limited
78
8. Balance Sheet Abstract and Company’s General Business Profile :
I. Registration details :
Registration No. State Code
Balance Sheet Date
II. Capital raised during the Year (Rs. in Crore)
Public Issue Rights issue
Bonus issue Private Placements
III. Position of mobilization and deployment of funds (Rs. in Crore)
Total Liabilities Total Assets
Source of funds :Paid-up Capital Reserves & Surplus
Secured Loans Unsecured Loans
Application of funds :Net Fixed Assets Investments
Net Current Assets Misc. Expenditure
Accumulated Losses
IV. Performance of Company (Rs. in Crore)
Turnover Total Expenditure
Profit before tax Profit after tax
Earnings per share in Rs. Dividend Rate %
V. Generic name of the principal products/services of company :(as per monetary terms)
Item Code No (ITC Code)
Product Description Iron Ore Lumps (60% Fe and above)
Item Code No (ITC Code)
Product Description Iron Ore Fines (62% Fe and above)
Item Code No (ITC Code)
Product Description Iron Ore Fines (Below 62% Fe)
Schedule - 23 : Detailed Information (Contd..)
0 1 - 0 1 6 7 4 0 1
3 1 0 3 0 9
N I L
2 6 4 . 3 2
1 2 8 5 9 . 7 0
N I L
N I L
1 2 8 5 9 . 7 0
3 9 6 . 4 7 1 1 2 4 0 . 4 4
N I L N I L
9 9 4 . 9 4
1 0 6 0 6 . 2 7
N I L
7 1 . 5 4
2 2 . 2 0
7 5 6 4 . 0 3 1 9 2 7 . 7 5
6 6 4 8 . 2 3 4 3 7 2 . 3 8
1 1 . 0 3 2 2 1
2 6 0 1 1 1 1 0
2 6 0 1 1 1 3 0
2 6 0 1 1 1 4 0
NMDC Limited
79
Schedule - 23 : Detailed Information (Contd..)9. Segment Reporting
The Management evaluates the Company's performance and allocates the resources based on analysisof various performance indicators by business / product segments i.e.
i) Iron Ore
ii) Other minerals & services
There are no inter-segment transfers for the Company. The Company has identified the primary andsecondary segment reporting under AS-17 as under:
Information about Business Segments
Primary Business Segments (Rs. in Crore)
Iron Ore Other Minerals Other Consolidated& Services reconciliation items Total
Current Previous Current Previous Current Previous Current PreviousYear Year Year Year Year Year Year Year
1 . R E V E N U E
Exte rna l Sa les 7 , 5 5 9 . 1 1 5,705.32 4 . 9 2 5.78 – 0.21 7 , 5 6 4 . 0 3 5,711.31
In te r -Segment Sa les 0 . 0 0 0.00 0 . 0 0 0.00 0 . 0 0 0.00 0 . 0 0 0.00
To ta l Revenue 7 , 5 5 9 . 1 1 5,705.32 4 . 9 2 5.78 – 0.21 7 , 5 6 4 . 0 3 5,711.31
2 . R E S U L T
Segmen t Resu l t 5 , 9 4 1.27 4,490.09 - 2 2 . 1 3 -24 .36 - 2 2 2 . 1 8 -252.12 5 ,69 6. 96 4,213.61
Unal locatedCorpora te Exps 8 2 . 2 2 88.11
Opera t ing P ro f i t 5 , 7 79 . 1 8 4,301.72
In te res t Expense – –
I n t e r e s t I n c o m e 8 6 9 . 0 5 645.75
I n c o m e Ta x e s -2,275.85 -1,696.49
N e t P r o f i t 4,372.38 3,250.98
3. OTHER INFORMATIONSegmen t Asse ts 2 , 1 5 9 . 7 9 1,338.34 7 3 . 4 6 7.50 10,284.40 7,504.92 12,517.65 8,850.76Segment L iab i l i t i es 3 9 3. 21 403.24 1 4 . 9 4 14.62 7 5 6 . 6 0 356.90 1 ,16 4. 75 774.76A d d i t i o n s t o a s s e t sd u r i n g t h e y e a r :F i x e d A s s e t s 2 4 8 . 3 3 116.78 0 . 0 2 0.83 3 . 6 2 6.37 2 5 1 . 9 7 123.98I n t a n g i b l e A s s e t s 0 . 0 4 0.24 – – 0 . 3 2 0.40 0 . 3 6 0.64Deprec ia t i on &Amor t i za t i on 6 7 . 7 0 56.95 1 . 7 7 -1.24 4 . 0 9 4.29 7 3 . 5 6 60.00expenses du r ingthe yea rNon -Cash expenseso the r than Deprec ia t i on 0 . 2 6 1.48 0 . 0 6 0.37 0 . 4 5 0.29 0 . 7 7 2.14& amor t i za t i on
NMDC Limited
80
Schedule - 23 : Detailed Information (Contd..)Secondary Segments
Sales Revenue by location of Customers:
(Rs. in Crore)
Revenue from External customers Current Year Previous Year
– Domestic 5,854.02 4,836.03
– Export : Through MMTC 1,710.01 875.28
TOTAL 7,564.03 5,711.31
Assets by Geographical Location:
(Rs. in crore)
Location Carrying amount of Additions to Fixed andSegment Assets Intangible Assets
Curr. Year Prev. Year Curr. Year Prev. Year
Chattisgarh 1,752.63 1,124.34 102.36 108.52
Andhra Pradesh 10,268.78 7,488.32 3.39 3.08
Others 432.54 238.10 146.58 13.02
TOTAL 12,517.65 8,850.76 252.33 124.62
10. DISCLOSURE OF EMPLOYEE BENEFITS AS PER AS-15(REV)
GENERAL DESCRIPTION OF DEFINED BENEFIT PLANS :
PLAN DESCRIPTION
1. Gratuity Eligible amount is paid to the employees on separation by NMDCGroup Gratuity Trust.
2. Accrued Leave Salary Encashment of accumulated leave is payable as per the rulesof the Company to the employees during the service/onseparation.
3. Settlement Allowance Employees are paid eligible amount at the time of retirementfor their settlement.
4. Post Retirement Medical Facilities Retired employees, opting for the Post Retirement BenefitScheme on contribution of prescribed amount, can avail medicalbenefits as per the Scheme.
5. Leave Travel Concession Payable to the eligible employees on availment/encashment ofHome Town LTC/All India LTC.
6. Family Benefit Scheme Monthly payments to disabled separated employees/legal heirsof deceased employees on deposit of prescribed amount, till thenotional date of superannuation.
7. Long Service Award Employees are presented with an award in kind on renderingprescribed service.
NMDC Limited
81
OTHER DISCLOSURES :
(Rs in crore)
Gratuity Accrued Settlement Post LTC FBS LongLeave Allowance retirement ServiceSalary medical Award
facilities
A. Changes in the presentvalue of the Obligationas on 31st Mar 2009
Present value ofobligation at thebeginning of the year 75.32 38.71 10.90 74.96 10.69 11.69 7.55
Interest cost 6.40 3.29 0.93 6.00 0.00 0.00 0.00
Current service cost 1.59 9.31 0.00 13.28 0.00 0.00 0.00
Past service cost 0.00 0.00 0.00 25.59 0.00 0.00 0.00
Benefits paid (9.88) (5.20) (0.66) (7.42) 0.00 0.00 0.00
Actuarial gain/losson obligation 3.65 2.92 0.49 (6.91) (5.37) (0.76) (0.02)
Present value of obligationat the end of the year 77.08 49.03 11.66 105.50 5.32 10.93 7.53
B. Changes in the fair valueof the Plan Assetsas on 31st Mar 2009
Fair value of plan assetsat the beginning of the year 74.37 38.71 10.90 0.00 0.00 0.00 0.00
Expected return onplan assets 6.94 4.32 1.10 0.00 0.00 0.00 0.00
Contributions 3.76 7.66 0.32 0.00 0.00 0.00 0.00
Benefits paid (9.88) (5.20) (0.66) 0.00 0.00 0.00 0.00
Actuarial gain/losson plan assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Fair value of plan assetsat the end of the year 75.19 45.49 11.66 0.00 0.00 0.00 0.00
C. Amounts recognised inthe Balance sheetas on 31st Mar 2009
Present value of theobligations at theend of the year 77.08 49.03 11.66 105.50 5.32 10.93 7.53
Fair value of plan assetsat the end of the year 75.19 45.49 11.66 0.00 0.00 0.00 0.00
Liability/Asset recognisedin the balance sheet 1.89 3.54 0.00 105.50 5.32 10.93 7.53
Schedule - 23 : Detailed Information (Contd..)
NMDC Limited
82
D. Amounts recognised in theP&L account for the yearended on 31st Mar 2009
Current service cost 1.59 9.31 0.00 13.28 0.00 0.00 0.00
Past service cost 0.00 0.00 0.00 0.00 25.59 0.00 0.00
Interest cost 6.40 3.29 0.93 6.00 0.00 0.00 0.0
Expected returnon plan assets (6.94) (4.32) (1.10) 0.00 0.00 0.00 0.00
Net actuarial gain/lossrecognised in the year 3.65 2.92 0.49 (6.91) (5.37) (0.76) (0.02)
Expenses recognisedin P&L a/c 4.70 11.20 0.32 37.96 (5.37) (0.76) (0.02)
E. Effect of one percentage point change in the assumed inflation rate in case of valuation of benefitsunder post-retirement medical benefit scheme :
one percentage point increase one percentage point decreasein medical inflation rate in medical inflation rate
i. Increase/Decrease onaggregate service andinterest cost of postretirement medical benefits Rs.0.45 cr (Rs.0.38 cr)
ii. Increase/(Decrease) onpresent value of definedbenefit obligationsas at 31-03-2009 Rs.9.45 cr (Rs.8.18 cr)
F. PRINCIPAL ACTUARIAL ASSUMPTIONS :
DESCRIPTION 2008-09 2007-08
i. Discount Rate 8% 8%
ii. Mortality Rate LIC 1994-96 ultimate LIC 1994-96 ultimate
iii. Medical Cost Trend rates 4% 4%
iv. Medical withdrawal rate 1% 1%
iv. Future salary increase 5% 5%
G. The Actuarial gains or losses arising during the year are taken to Profit and Loss account.
Schedule - 23 : Detailed Information (Contd..)(Rs in crore)
Gratuity Accrued Settlement Post LTC FBS LongLeave Allowance retirement ServiceSalary medical Award
facilities
NMDC Limited
83
Schedule - 24 : Notes Forming Part of Accounts1. Contingent liabilities:
Rs. in Crore
Particulars 2008-09 2007-08
1.1 Claims against the company not acknowledgedas debts consists of:
a Appeal pending in respect of levy of TDS 0.36 0.36
b Disputed claims under Property tax, Export tax, Conservancy Tax,Sales tax etc., 34.97 36.96
c Claims by contractors under arbitration 20.07 21.14
d Other claims on company not acknowledged as debts 4.08 4.11
1.2 Uncalled liability on Shares partly paid:in Krishnapatnam Railway Company Ltd. 18.25 28.75
1.3 Estimated amount of contracts remainingto be executed on Capital account 373.22 318.57
1.4 Contingent liability on Bills discounted underLCs / counter guarantees given for BGs 15.54 247.67
2. Disclosures under Accounting Standards:
2.1 Employee Benefits (AS-15 - Rev): Necessary details have been disclosed in Schedule 23-Detailedinformation.
2.2 Segment Reporting (AS-17): Necessary details have been disclosed in Schedule 23-Detailedinformation.
2.3 Related Party Disclosures (AS-18):
(i) List of Related parties with whom transactions have taken place and their relationships:
A. Subsidiary Companies:
1. JK Mineral Development Corporation Limited, Jammu
2. NMDC SARL, Madagaskar
3. NAM INDIA Mineral Development Corporation (PTY) Limited, Namibia
4. NMDC-CMDC Ltd., Raipur
B. Asssociate Companies:
Romelt- Sail (India) Limited, New Delhi
C. Key Management Personnel: (Directors)1. Sri Rana Som
2. Sri K.R.Venkateswarlu
3. Sri VK Sharma
4. Sri S.Venkatesan (from 01/08/08)
5. Sri N K Nanda (from 01/12/08)
6. Sri V.K.Jain (till 31/07/08)
7. Sri. P.S.Upadhyaya (till 30/11/08)
NMDC Limited
84
(ii) Transactions during the year with Related parties:
Rs. crore
Sl No Particulars 2008-09 2007-08
1. Subsidiary Companies:
a) Investments:
Opening balance 11.16 11.16
Investment made during the year 0.77 0.00
Closing balance 11.93 11.16
Investment deration/Provision 11.16 11.16
b) Loans and Advances:
Opening balance 0.00 0.00
Advances given during the year 0.33 0.16
Adjusted against amounts payable 0.00 0.00
Advance written off during the year 0.29 0.16
Closing balance 0.04 0.00
2. Associate Companies:
Investments:
Opening balance 0.11 0.11
Paid during the year towards equity 0.00 0.00
Closing balance 0.11 0.11
Deration against diminution in value of investment 0.11 0.11
3. Key Management Personnel:
Managerial Remuneration 1.13 0.51
Assets sold at concessional values 0.01 0.01
2.4 Earnings per share (AS-20): The details are as under:
Year Ended
Particulars 31.03.09 31.03.08
1. Profit after Tax (Rs Crore) 4372.38 3250.98
2. No of Equity shares 3,96,47,16,000 13,21,57,200
3. Nominal value per Equity share (Rs) 1 10
4. Basic and Diluted Earnings per share (Rs) 11.03 245.99
5. EPS post split (from 21-04-2008) Rs. 0.00 24.60
6. EPS post split and bonus (from 22-05-2008) Rs 11.03 8.20
NMDC Limited
85
2.5 Consolidated Financial Statements (AS-21): The two subsidiaries of the Company Viz., NMDC SARL,Madagascar and NAM India Mineral Development Corporation Limited, Namibia are under closure andin the process of winding up. There are no significant transactions in respect of another subsidiary,J&K Mineral Development Corporation Ltd., Jammu. All the above subsidiaries significantly impair theirability to transfer funds to the parent company. The Company has been writing off the loan advancedto these subsidiaries and de-rated the equity investment of these subsidiaries accordingly.
A new subsidiary, NMDC-CMDC Ltd., Raipur has been incorporated during the year. Since the operationsof this venture are yet to commence, the transactions are not significant.
Considering the above aspects and in terms of Clause 11 of Accounting Standard-21, consolidatedfinancial statements of NMDC Ltd., have not been drawn up for the year 2008-09 also, as per the practicefollowed in earlier years.
2.6 Accounting for Taxes on Income (AS-22): The details of deferred tax liability as at 31st March 09 isas follows:
(Rs. in crore)
Year Ended
Particulars 31.03.09 31.03.08
A. Deferred Tax Liability :Related to Fixed Assets 67.96 47.22
B. Deferred Tax assets:1. Provision for bad & doubtful debts and advances 0.63 0.842. Provision for post retirement medical benefits 4.68 25.483. Provision for other employee benefits 0.00 10.184. Accrued Expenses 4.06 4.175. Other provisions 0.55 0.54TOTAL (B) 9.92 41.21
C. Net Deferred Tax Liability (A-B) 58.04 6.01
3.0 Discontinuing Operations (AS-24) :It has been decided to lease / sell the plant and machinery of Silica Sand Project, Lalapur and actionhas been initiated accordingly. Pending the above and as the transactions of the unit are not material,no further disclosure under the standard is considered necessary.
4.0 Impairment of Assets (AS - 28):During the year, the Hon'ble Supreme Court has revoked the suspension of the activities of PannaDiamond Project, subject to complying with certain conditions. The unit is yet to commence production.
There is no change during the year in the status of impaired UPFO plant, which is under 'care &maintenance'.
The impairment of assets has been reviewed during the year in respect of the above cash generatingunits, included under the segment 'Other Minerals and Services' and necessary adjustments have beencarried out as detailed below :
Rs in crore
Unit Year of Impaired Adjustments during 2008-09 Impaired Amountimpairment Amount as on 31-03-09
as on 01-04-08 Reversal Addition
UPFO, Vizag 2005-06 37.97 0.51 0.00 37.46SSP, Lalapur 2005-06 12.54 0.00 0.00 12.54DMP, Panna 2006-07 20.93 0.03 1.71 22.61
NMDC Limited
86
The Recoverable amount of the assets of the above units has been arrived at considering the 'value
in use'. Since the value in use has resulted in negative cash flows, the recoverable amount has been
taken as nil without applying any discount rate.
5. Provisions, Contingent Liabilities and Contingent Assets (AS-29): Necessary details in regard to
provisions have been disclosed in Schedule 13-Provisions.
6. Others:
6.1 The Research & Development expenditure, charged to Profit & Loss account is Rs. 17.36 crore (previous
year Rs. 12.87 crore), including expenditure of Rs. 10.38 crore (previous year Rs. 7.24 crore) on feasibility
studies.
6.2 Govt. of India, Ministry of Steel through letter dated 28/03/2006 had directed the Company to merge
M/s Sponge Iron India Ltd (SIIL) with NMDC Ltd. Legal formalities for merger of M/s SIIL with the Company
are under progress. Pending merger of M/s SIIL with the Company, no accounting adjustments are
made.
6.3 The share holders of the Company have in the Extra ordinary General Meeting held on 03.04.2008
approved:
a) the splitting up of the existing equity shares of Rs.10/- each into shares of Re 1/- each;
b) the issue of two bonus shares of Re 1/- each for every share of Re 1/- held;
c) the proposal to increase the Authorised share capital of the Company from the present Rs 150
crore to Rs 400 crore, by creation of further 250,00,00,000 equity shares of Re 1/- each ranking
pari passu with the existing shares; and
d) relevant amendments to Memorandum of Association and Articles of Association and capitalization
of reserves.
6.4 The undistributed golden jubilee gifts pertaining to the eligible employees are kept in the custody of
the Company.
6.5 A liability of Rs 0.38 crore has been made during the current year, towards Rehabilitation Cess u/s
441A of the Companies Act, 1956 at the minimum rate of 0.005% on the turnover (cumulative provision
Rs 1.24 crore (Previous year Rs. 0.86 crore)) and the same is not remitted to Central Govt., in the
absence of any notification issued by the Central Govt. in this regard.
NMDC Limited
87
6.6 Replies to some of the letters seeking confirmation of balances with regard to Sundry Debtors, Advances
and Deposits are awaited.
6.7 Figures for the previous year have been regrouped wherever considered necessary so as to conform
to the classification of the current year.
Subject to our Report of even date For and on behalf of the Board
For RAMAMOORTHY (N) & CO,Chartered Accountants
(CA SURENDRANATH BHARATHI) (KR VENKATESWARLU) (RANA SOM)Partner Director (Finance) Chairman-cum-Managing DirectorMembership No. 23837
(KUMAR RAGHAVAN)Company Secretary
Place : New DelhiDate : 29-May-2009
NMDC Limited
88
(Rs. in Crore)
For the Year ended 31st March, 2009 For theYear
Description Township School & Medical Social & Transport Total endedEduca- Facilities Cultural 31st
tional Activities March,Facilities 2008
Consumption ofStores & Spares 0.43 0.00 0.20 0.00 0.18 0.81 0.65
Power 4.81 0.58 0.92 1.05 0.00 7.36 7.66
Salaries, Wages& Bonus 9.84 2.21 7.35 0.00 1.00 20.40 15.60
Contribution toProvident Fund 0.85 0.19 0.70 0.00 0.08 1.82 1.44
Group Gratuity 1.37 0.27 0.97 0.00 0.15 2.76 0.04
Welfare Expenses 0.80 6.15 10.41 0.36 0.87 18.59 21.09
Repairs &Maintenance 5.19 1.09 2.35 0.05 0.56 9.24 7.40
Rates, Taxes &Insurance 0.02 0.00 0.00 0.00 0.16 0.18 0.14
Other Expenses 0.71 0.25 0.47 0.00 0.61 2.04 2.53
Depreciation 2.74 0.17 0.22 0.03 0.21 3.37 2.74
Total Expenditure 26.76 10.91 23.59 1.49 3.82 66.57 59.29
Less : Receipts 0.77 0.04 0.72 0.00 0.01 1.54 1.38
Net Expenditure 25.99 10.87 22.87 1.49 3.81 65.03 57.91
Schedule - 25 : Expenditure on Social Amenities
NMDC Limited
89
(Rs. in Crore)
Details For the Year ended For the Year ended31st March, 2009 31st March, 2008
1. Expenditure on Foreign Travel :
1.1 Number of Foreign Tours undertaken (No) 56 68
1.2 Expenditure incurred 1.41 1.53
2. Details of expenditure on PublicRelations/Publicity :
2.1 Expenditure on Public Relations/Publicity 11.95 27.86
2.2 Expenditure on staff engaged on PublicRelations/Publicity works :
2.2.1 Salaries & Allowances 0.14 0.05
2.2.2 Welfare Expenses 0.00 0.00
2.2.3 Other Expenses 0.00 0.00
0.14 0.05
2.3 Ratio of Annual expenditure on 1 : 707 1 : 229Advertisement/Publicity to Annual Income
Schedule - 26 : Additional Information on Expenditure onForeign Travel & Public Relations/Publicity
NMDC Limited
90
(Rs. in Crore)
Year ended Year ended31-Mar-09 31-Mar-08
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before Taxes and Extraordinary items 6,648.23 4,947.47
Adjustments for :
Depreciation 73.56 59.97
Interest on Investments – UTI Tax free bonds 0.00 -1.55
Interest on deposits with banks -866.96 -638.28
Interest - Others -1.83 -5.92
Increase in Prov for bad & doubtful advances -0.63 0.95
Profit on sale of fixed assets -0.01 -0.64
Profit on sale of Investments 0.00 -2.60
Deferred revenue expenditure written off 3.46 3.46
Operating profit before working capital 5,855.82 4,362.86
Adjustments for :
Increase(-)/Decrease(+) in Inventories -136.32 -39.40
Increase(-)/Decrease(+) in Receivables -538.92 -205.29
Increase(-)/Decrease(+) in Loans & Advances -90.88 -14.01
Increase(+)/Decrease(-) in current Liabilities & Provisions 93.13 238.74
Increase(+)/Decrease(-) in other current assets -112.09 -102.02
Cash Generated from Operations 5,070.74 4,240.88
Interest paid 0.00 0.00
Direct taxes -2,292.45 -1,764.94
Net Cash Flow from Operating Activities 2,778.29 2,475.94
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets -252.33 -124.62
Increase(-)/Decrease(+) in Capital work in progress -136.48 1.14
Purchase of Investments -11.27 -11.25
Interest on tax-free Bonds 0.00 1.55
Interest on deposits with Banks 866.96 638.28
Interest - others 1.83 5.92
Sale of Investments 23.01 4.95
Sale/Deletion of Fixed Assets 0.20 2.13
Increase(-)/Decrease(+) in Deferred Revenue Expenditure -1.11 -1.21
Net Cash from Investing Activities 490.81 516.89
Cash Flow Statement for the year ended 31st March, 2009
NMDC Limited
91
(Rs. in Crore)
Year ended Year ended31-Mar-09 31-Mar-08
C. CASH FLOW FROM FINANCING ACTIVITIES
Payment of dividends -728.25 -643.20
Net cash used in Financing Activities -728.25 -643.20
NET INCREASE IN CASH AND CASH
EQUIVALENTS (A + B + C) 2,540.85 2,349.63
Cash & Cash equivalents at the beginning of the year 7,198.80 4,849.17
Cash & Cash equivalents at the end of the year 9,739.65 7,198.80
2,540.85 2,349.63
Cash and Cash Equivalents consists of Cash in hand and balances with various banks in current accounts& deposit accounts.
Subject to our Report of even date For and on behalf of the Board
For RAMAMOORTHY (N) & CO,Chartered Accountants
(CA SURENDRANATH BHARATHI) (KR VENKATESWARLU) (RANA SOM)Partner Director (Finance) Chairman-cum-Managing DirectorMembership No. 23837
(KUMAR RAGHAVAN)Company Secretary
Place : New DelhiDate : 29-May-2009
NMDC Limited
92
J&KMDC Limited
93
Twentieth Annual Report2008-2009
J&K Mineral Development Corporation Limited(A Subsidiary of NMDC Limited)
Regd. Office : 33-B/B, IInd Extension, Gandhi Nagar, Jammu - 180 004Phone : 0191-2431396, Fax No.0191-2436950
C O N T E N T SDirectors’ Report 94
Auditors’ Report 99
Balance Sheet 104
Profit & Loss Account 105
Schedules 106
Balance Sheet Abstract 115
J&KMDC Limited
94
Directors’ Report for the year 2008 - 2009ToThe Members
J&K Mineral Development Corporation Ltd.Jammu.
I have pleasure in presenting to you on behalf ofthe Board of Directors, the Twentieth Annual Report
of your Company for the year ended 31 March 2009.
1. Present Status:
The Board of Directors at its 57th Meeting
held on 23rd May, 2002 had deliberated andreviewed the Status of production of Dead
Burnt Magnesite including the sale of RawMagnesite and other efforts made by the
Company for revival. The Board desired to stop
al l the developmental act ivi t ies of theCompany and to take up the issue of
dissolution and winding up of J&KMDC withthe Government of India and State Government
of J&K. The Board also desired to refer the
matter to the Boards of NMDC and JKML.
As desired, the Company had taken action
with the Government of India for approval ofwinding up of J&KMDC Limited and also with
the Holding Company (NMDC Ltd), State
Government of Jammu & Kashmir and J&KMinerals Limited. The matter was submitted
to the Board of Directors of NMDC at its 358thMeeting held on 14.6.2002 and the Board of
NMDC had approved the action as suggested
by the Board of J&KMDC Limited and desiredthat the same be referred to the Administrative
Ministry for its approval.
In the mean time, the Board of JKML reviewed
the matter for winding up of J&KMDC Ltd inits 157th meeting held on 30th November 2004
and the Board of JKML desired to ascertain
the demand for raw Magnesite ore by marketsurvey from within and outside the state of J&K
and to work out its competitiveness for salein the market vis-a vis imported material
considering the change in present market
scenario.
Keeping in line with the requirement of JKML,the Board of J&KMDC Ltd decided to conduct
various market surveys. For incurring theexpenditure, the Board of NMDC Ltd. decided
to take up the above studies and in its 396th
Meeting held on 30.05.2007, it was decidedto continue support for a further period of two
years.
Further, NMDC Ltd., in its 409th Board Meeting
held on 28.01.2009, decided to provide
additional support of Rs. 12 lakhs (approx)during the financial year 2008-09 and continue
to support the set-up for further two years from01.04.2009 to 31.03.2011 by contributing
Rs. 20 lakhs per annum.
NMDC Ltd submitted lease renewal
application with Government of Jammu &
Kashmir for Panthal Magnesite deposit for afurther period of 20 years with effect from
02.01.2009 and also furnished an Undertakingin the shape of Board Resolution for transfer
of the same to J&KMDC Ltd., after its renewal.
The renewal application is in process withGovt. of J&K.
The Board in i ts 89th and 90th meetingsdeliberated upon revival of Panthal Magnesite
Project and status of Detailed Project Report
(DPR) to be finalized by Consultant, M/s Meconon erection and operation of DBM Plant of
Capacity of 30,000 TPA at an estimated projectcost of Rs. 114 crores. Accordingly, various
efforts are being taken.
The Company has not produced sized
raw Magnesite during the year 2008-2009.
The total expenditure incurred during2008-09 including provision for taxation is
Rs. 30.43 lakhs.
2. Share Capital:
The Authorized Share Capital of the Companyis Rs.10.00 crores divided into 10,00,000
Equity Shares of Rs. 100/- each. Your
J&KMDC Limited
95
Company has issued till 31st March, 2009,3,96,002 Equity Shares of Rs.100/- each fully
paid to NMDC Limited (including 1,07,937shares of Rs.100/- each other than cash) and
78,001 Equity Shares of Rs.100/- each fully
paid to J&K Minerals Ltd, against cashreceived. The total paid up share capital of the
Company as on 31st March, 2009 stands at
Rs.4.74 crores against the subscribed capitalof Rs. 6.00 crores.
NMDC Limited is advancing the loan to meetthe day-to-day expenditure of the Company in
the absence of Equity subscription and furtherfunding from J&KML. The loan amount
advanced by NMDC is Rs. 521.61 lakhs up to
31.3.2009.
3. Statutory Information:
(i) Under the provisions of Section 217(2-A)
of the Companies Act, 1956 read with the
Companies (part iculars of theemployees) Rules 1975, no employee of
your Company was in receipt ofremuneration as prescribed under the
said rules.
(ii) Further, under the provisions of Section
217(1)(e) of the Companies Act, 1956
read with the Companies (Disclosure ofparticulars in the Report of Board of
Directors) Rules 1988, the information
regarding conservation of energy,technology absorption, foreign exchange
earnings and out go concerning yourCompany is ‘NIL’.
4. Audit:
M/s Vijay Gupta & Co., Chartered Accountants,
Jammu, have been appointed on the adviceof the Office of the Comptroller and Auditor
General of India as the statutory auditors of
your Company for the year 2008-2009. TheStatutory Auditors’ comments on the Accounts
of the Company for the year 2008-2009 andthe Management’s reply thereon are at
Annexure-I, which forms part of this Report.
The Comments of Comptrol ler & AuditorGeneral of India under Section 619(4) of
the Companies Act, 1956 on the Accountsof the Company for the year 2008-2009 are
at Annexure-II , which forms part of this
Report.
5. Board of Directors: (as on 31st March, 2009)
During the year Shri R.N. Aga,
Shri S. Venkatesan, and Shri N.K. Nanda werenominated by NMDC Limited in place of
Dr. Uddesh Kohli , Shri V.K. Jain and
Shri P.S. Upadhyaya respectively. Governmentof Jammu & Kashmir nominated Shri Manzoor
Ahmad Shah and Shri V.C. Sharma in placeof Shri P.S. Betab and Shri A.K. Khullar
respectively. All nominees were appointed as
Addit ional Directors on the Board of theCompany.
Board placed on record its appreciation for
the services rendered by Shri V.K. Jain,Shri P.S.Upadhyaya, Dr. Uddesh Kohli ,
Shri P.S.Betab and Shri A.K. Khullar duringtheir tenure as Directors of the Company.
6. Directors’ Responsibility Statement:
Pursuant to the requirement under Section
217(2AA) of the Companies Act, 1956, withrespect to Directors’ Responsibility Statement,
it is hereby confirmed:
(i) That in the preparation of the accounts
for the financial year ended 31st March,
2009, the appl icable AccountingStandards have been followed along with
proper explanation relating to materialdepartures;
(ii) That the Directors have selected such
accounting policies and applied themconsistently and made judgments and
estimates that were reasonable and
prudent so as to give a true and fair viewof the state of affairs of the Company at
the end of the financial year and of theprofit or loss of the Company for the year
under review;
J&KMDC Limited
96
(iii) That the Directors have taken proper andsufficient care for the maintenance of
adequate accounting records inaccordance with the provisions of the
Companies Act, 1956 for safeguarding
the assets of the Company and forpreventing and detecting fraud and other
irregularities;
(iv) That the Directors have prepared the
accounts for the financial year ended 31
March 2009 on a ‘going concern’ basis.
7. (a) Board Meetings:
During the year under review five (5)Board meetings were held as required
under the provisions of the CompaniesAct, 1956.
(b) Audit Committee:
The provisions under Section 292-A of
the Companies Act, 1956, for constitutionof Audit Committee of Directors is not
applicable to the Company.
8. Corporate Governance:
The guidelines on Corporate Governance for
Central Public Sector Enterprises 2007 issuedby the Government of India, Department of
Public Enterprises under exemption to clause5.3 states: ‘For the purpose of these
guidelines, only those subsidiaries whoseturnover or net worth is not less than 20% of
the turnover companies.’
Since the turnover and net worth of J&KMDC
is much less than 20% of the turnover and networth of NMDC, the provisions of the
Corporate Governance on subsidiarycompanies have been regarded as not
applicable to J&KMDC.
9. Acknowledgement:
Your Directors appreciate the efforts put in bythe employees of your Company and the
employees of NMDC Ltd., who have beenclosely associated with the project. The
Directors grateful ly acknowledge the
assistance, support and valuable guidancegiven to your Company by the Government of
India (Ministry of Steel), NMDC Ltd., J&KMinerals Limited and the Government of
Jammu and Kashmir.
For and on behalf of Board
Sd/-Place : Hyderabad Rana SomDate : 15.05.2009 Chairman
J&KMDC Limited
97
REPLIES OF THE MANAGEMENT ON COMMENTS OFTHE STATUTORY AUDITORS’ REPORT-2008-09
Auditors’ Comments Management’s Reply
Annexure - I
Point No.9 to Annexure to Auditors’ Report:
According to the information and explanations givento us the internal control for purchase of inventory
and fixed assets and for sale of goods during the
year has been exercised by employees of the holdingCompany (N.M.D.C.Ltd.), who are neither the
employees of the Company nor are they bound byany contract between the company and them for
providing such service (of internal control) to the
Company and such system of control lacks theessential principle of accountability in any internal
control mechanism. As such the internal controlprocedure commensurate with the size of the
company and nature of its business for purchase of
stores, equipments, etc. can not be termed asadequate.
NMDC is an established mining company havingexecutives with expertise in different fields. In order
to minimize the administrative expenditure of the
company, the service of required personnel ofNMDC wherever required is being taken. NMDC
being a holding company and as Management ofthe Company is being controlled by NMDC, it is
also responsible for any contingency. Though
required assistance is being taken for examiningand processing the proposals, the proposals are
being finally approved by the Director-in-charge towhom powers have been delegated by Board.
J&KMDC Limited
98
Annexure - IICOMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIAUNDER SECTION 619(4) OF THE COMPANIES ACT, 1956 ON THE ACCOUNTSOF J&K MINERAL DEVELOPMENT CORPORATION LIMITED FOR THE YEARENDED 31 MARCH 2005.
The Comptroller and Auditor General of India has decided not to review the report of
the Auditors for the year ended 31 March 2005 on the accounts of J&K Mineral
Development Corporation Limited and as such has no comments to make under Section
619(4) of the Companies Act, 1956.
Sd/-(Vijaya Moorthy)
Principal Director of Commercial Audit& ex-officio Member, Audit Board-I,
New Delhi.
Place : New DelhiDated : 27 June, 2005
Comments of the Comptroller and Auditor General of India under Section 619(4)of the Companies Act, 1956 on the accounts of J&K Mineral DevelopmentCorporation Limited for the year ended 31 March 2009.
The preparation of financial statements of J&K Mineral Development Corporation Limited for the
year ended 31 March 2009 in accordance with the financial reporting framework prescribed under the
Companies Act, 1956 is the responsibility of the management of the Company. The Statutory Auditors
appointed by the Comptroller and Auditor General of India under Section 619(2) of the Companies Act,
1956 are responsible for expressing opinion on these financial statements under Section 227 of the
Companies Act, 1956 based on independent audit in accordance with the auditing and assurance
standards prescribed by their professional body, the Institute of Chartered Accountants of India. This
is stated to have been done by them vide their Audit Report dated 04 May 2009.
I on behalf of the Comptroller and Auditors General of India have decided not to review the report of
the Statutory Auditors’ on the accounts of J&K Mineral Development Corporation Limited for the
year ended 31 March 2009 and as such have no comments to make under Section 619(4) of the
Companies Act, 1956.
For and on the behalf of theComptroller and Auditor General of India
Sd/-(Birendra Kumar)
Principal Director of Commercial Audit& Ex-officio Member, Audit Board-I,
New Delhi.Place : New DelhiDated : 15 May 2009
J&KMDC Limited
99
ToThe Members
J&K Mineral Development Corporation Ltd.Jammu
We have audited the attached Balance Sheet of J&K
Mineral Development Corporation Limited, as at31st March 2009 and also the Profit and Loss
Account for the year ended on that date annexed
thereto . These f inancial statements are theresponsibility of the Company’s management. Our
responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing
standards general ly accepted in India. Those
Standards require that we plan and perform theaudit to obtain reasonable assurance about
whether the financial statements are free of materialmisstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and
disclosures in the financial statements. An auditalso includes assessing the accounting principles
used and signif icant est imates made bymanagement, as well as evaluating the overall
financial statement presentation. We believe that
our audit provides a reasonable basis for ouropinion.
As required by the Companies (Auditor’s Report)
Order, 2003 issued by the Central Government ofIndia in terms of sub-section (4A) of section 227 of
the Companies Act, 1956, we enclose in theAnnexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referredto above, we report that:
(i) We have obtained all the information and
explanations, which to the best of ourknowledge and belief were necessary for the
purposes of our audit;
(ii) In our opinion, proper books of accounts asrequired by law have been kept by the
Auditors’ Report
Company so far as appears from our
examination of those books;
(iii) The Balance Sheet and Profi t and Loss
Account dealt with by this report are in
agreement with the books of account;
(iv) In our opinion, the Balance Sheet and Profit
and Loss Account dealt with by this report
comply with the accounting standards referredto in sub-section (3C) of Section 211 of the
Companies Act, 1956;
(v) As per information and explanations given tous, the clause (g) of sub-section (1) of section
274 of the Companies Act, 1956 is notapplicable to this Company;
(vi) In our opinion and to the best of our
information and according to the explanationsgiven to us, the said accounts, subject to para
9 of our report hereto as required by the
Companies (Auditors Report) Order, 2003,give the information required by the
Companies Act, 1956, in the manner sorequired and give a true and fair view in
conformity with the accounting principles
generally accepted in India;
a) In the case of Balance Sheet, of the state
of affairs of the Company as at 31st
March, 2009; and
b) In the case of Profit & Loss Account, of
the loss for the year ended on that date.
For VIJAYA GUPTA & CO.Chartered Accountants
Sd/-(VIJAY GUPTA)
Place : Jammu ProprietorDate : 04-05-2009 Memb.No.-080034
J&KMDC Limited
100
As required by the Companies (Auditors’ Report)
Order, 2003 issued by the Central Government of
India in terms of section 227 (4A) of the Companies
Act, 1956 and in terms of information and
explanations given to us and on the basis of such
checks as we considered appropriate, we report
that :
1) The Company has maintained proper records
showing full particulars including quantitative
details and situation of fixed assets.
2) Fixed assets are stated to have been
physically verified by the management at the
end of the year which, in our opinion, is
reasonable having regard to the size of the
Company and the nature of its assets. No
discrepancies are reported to have been
noticed on such verification.
3) The Company, during the past period, has
transferred a few of the assets to its Holding
Company on book value basis.
4) Physical verification has been conducted by
the management at the end of the year in
respect of inventory and in our opinion such
frequency of verification is reasonable.
5) According to the information and
explanations given to us, in our opinion, the
procedure of physical verification in respect of
inventory followed by the management is
reasonable and adequate in relation to the
size of the Company and the nature of its
business.
6) The Company is maintaining proper
records of inventory and no discrepancies are
reported to have been noticed on physical
verification.
Annexure to the Auditors’ Report7) The Company has not granted any loan,
secured or unsecured, to the Companies,
firms or other parties falling within the purview
of Section 301 of the Companies Act 1956 and
hence no such registers are reported to have
been maintained. The Company has taken
certain amounts from its holding Company
N.M.D.C. Ltd. during the year and the
maximum balance involved during the year
was Rs.27.16 lakhs and the year end balance
of such loan stands at Rs.521.61 lakhs.
8) The Company has taken interest free amounts
from its Holding Company NMDC Ltd during
the year. The terms and conditions of such
advance are prima facie not prejudicial to the
interest of the Company.
9) According to the information and
explanations given to us the internal control
for purchase of inventory and fixed assets
and for sale of goods during the year has
been exercised by employees of the holding
Company (N.M.D.C.Ltd.), who are neither the
employees of the Company nor are they
bound by any contract between the company
and them for providing such service (of
internal control) to the Company and such
system of control lacks the essential
principle of accountability in any internal
control mechanism. As such the internal
control procedure commensurate with the
size of the company and nature of its
business for purchase of stores,
equipments, etc. can not be termed as
adequate.
10) In our opinion according to the information and
explanations given to us no purchase of
goods and material & for sale of goods have
J&KMDC Limited
101
been made in pursuance of contracts or
arrangements under section 301 of the
companies act 1956 as aggregate to
Rs. 5,00,000 or more in respect of each party
and no such registers are reported to have
been maintained.
11) The Company has not accepted any deposits
from the public as defined under Section 58
A of the Companies Act 1956.
12) In our opinion, the Company has an internal
audit system commensurate with the size and
nature of its business.
13) Maintenance of cost records has not been
prescribed by the Central Government under
Section 209 (1) (d) of the Companies Act 1956
for this Company.
14) i) According to the information and
explanations given to us and the records
examined by us, the Company has been
general ly regular in deposit ing with
appropriate Authorit ies, undisputed
Statutory dues including P.F., investor
education protection fund, employees
state insurance, income tax, fr inge
benefits tax, sales tax, wealth tax, service
tax, custom duty, excise duty, cess and
other material statutory dues applicable
to it.
ii) According to the information and
explanations given to us and the records
examined by us, there were no
undisputed amounts payable in respect
of Income Tax, Sales Tax, Provident
Fund, Investor Education & Protection
Fund, Employees State Insurance,
Wealth Tax, Service Tax, Custom Duty,
Excise Duty, cess and any other statutory
dues wherever applicable etc. as at 31st
March 2009 which were outstanding for
a period of more than 6 months from the
date of they became payable, except for
a sum of Rs.26.10 lakhs based on the
decision of Income Tax Tribunal for
which, as explained, demand from
Income Tax Department has not yet been
received.
15) There were no pending dispute for dues of
sales tax/Income Tax/custom Duty/wealth Tax,
Service Tax, excise duty/cess.
16) Accumulated losses of the company at the
end of the financial year-2008-2009, are more
than its net worth and the Company has
suffered cash losses in current as well as in
the immediately preceding financial year.
17) The Company has not taken any loan from
Financial Institution or bank or debenture
holder for the year.
18) The Company has not granted loans and
advances on the basis of security by way of
pledge of shares, debentures and other
securities.
19) The provisions of any special statute
applicable to chit fund are not applicable to
this Company.
20) The Company is not dealing or trading in
shares, securit ies, debentures and other
investments.
21) In our opinion and according to the information
and explanation given to us, the Company has
not given any guarantee for loans taken by
others from the Bank or Financial Institutions
during the year.
22) The Company has not taken any term loans
during the year.
J&KMDC Limited
102
23) No funds raised during the year on short term
basis have been used for long term
investment.
24) The Company has not made any preferential
allotment of shares to parties and Companies
covered in the register maintained under
section 301 of the Act.
25) The Company has not issued any debentures
and hence no creation of securit ies was
required.
26) The Company has not made any public issue
during the year.
27) According to the information and explanation
given to us, no fraud on or by the Company
has been noticed or reported during the
course of our audit.
For VIJAYA GUPTA & CO.Chartered Accountants
Sd/-(VIJAY GUPTA)
Place : Jammu ProprietorDate : 04-05-2009 Memb.No.-080034
J&KMDC Limited
103
Significant Accounting Policies1. Incidental expenditure during construction
period:
Expenditure incurred by the Company duringthe construction/ trial runs of the project(including interest on borrowed capital, ifany) are capitalized.
2. Depreciation:
2.1 Depreciation is charged on straight l inemethod based on the l i fe of the assetdetermined on technical assessment. Therates are equal to or higher than thoseprescribed under schedule XIV of theCompanies Act, 1956. The depreciation ischarged on pro rata monthly basis onadditions/disposal of assets during the yeartaking the f irst day of the month foracquisition and the last day of the month fordisposal.
2.2 Plant & Machinery, electrical installations,sanitary and water supply installations, officeinstallations, office appliances and otherequipments and those assets grouped underthe category of “other assets” individuallycosting Rs.5,000/- and below aredepreciated fully in the year of use till 15th
December 1993. From 16th December 1993onwards assets of all description valuing Rs.5,000/- or below are depreciated fully duringthe year of use.
3. Miscellaneous Expenditure:
Development expenses (pre-constructionexpenses), expenditure on removal of overburden and preparation of Mining benchesand preliminary expenses are amortised infive annual installments from the year ofcommencement of commercial production.
4. Inventories:
4.1 Items of inventory as cert i f ied by themanagement are valued on the basismentioned below:
4.1.1 Finished Goods are valued at cost or NetRealisable Value, whichever is lower.
4.1.2 Stores and Spares (excluding stationery,which is charged off to revenue onprocurement) at cost on weighted averagemethod.
4.1.3 Loose tools and implements on stock (itemsissued during the year are charged off in thatyear) at cost.
4.2 No credit is taken in the accounts in respectof the following:
4.2.1 Stock of run of mine ore and dumped fines.
4.2.2 Stock of run of mine ore generated duringconstruction period pending assessment ofquality and saleability.
4.2.3 Partly used stores and spares kept in stores.
5. Employees benefits:
5.1 Provident fund contributions are made as perthe provisions of the J&K EmployeesProvident Fund Act, 1961 and deposited withRegional Provident Fund Authori t ies,Jammu.
5.2 Provision for Gratuity and Leave Encashmentare made based on accrued liability at theend of each financial year.
In terms of our report of even date For and on behalf of Board
For VIJAYA GUPTA & CO.Chartered Accountants
Sd/- Sd/- Sd/- Sd/-(VIJAY GUPTA) (K.R. VENKATESWARLU) (N.K. NANDA) (RANA SOM)Proprietor Director Director ChairmanMemb. No.-080034
Sd/-Place : Jammu (MOHD. IMAM) JammuDate : 04.05.2009 Company Secretary 04.05.2009
J&KMDC Limited
104
Balance Sheet as at 31st March, 2009(Rupees)
Schedule As at As at
Description No. 31st March, 2009 31st March, 2008
Sources of Funds
Share Capital 1 4,74,00,300 4,74,00,300
Loans Nil Nil
TOTAL 4,74,00,300 4,74,00,300
Application of Funds
Fixed Assets:
Gross Block 2 4,95,08,312 4,94,27,162
Less : Depreciation 4,27,86,323 4,27,83,618
Net Block 67,21,989 66,43,544
Capital Work In Progress 3 Nil Nil
67,21,989 66,43,544
Current Assets, Loans & Advances:
Inventories 4 36,839 36,839
Cash & Bank Balances 5 1,37,989 1,23,093
Loans and Advances 6 5,309 15,021
1,80,137 1,74,953
Less : Current Liabilities & Provisions:
Current Liabilities 7 5,43,92,519 5,16,04,899
Provisions 8 33,47,123 30,08,259
5,77,39,642 5,46,13,158
Net Current Assets -5,75,59,505 -5,44,38,205
Miscellaneous Expenditure: 9 Nil Nil
(to the extent not written off or adjusted)
Profit & Loss Account (Debit Balance) 9,82,37,816 9,51,94,961
TOTAL 4,74,00,300 4,74,00,300
Accounting Policies & Schedules 1 to 16 form part of Accounts.
In terms of our report of even date For and on behalf of Board
For VIJAYA GUPTA & CO.Chartered Accountants
Sd/- Sd/- Sd/- Sd/-(VIJAY GUPTA) (K.R. VENKATESWARLU) (N.K. NANDA) (RANA SOM)Proprietor Director Director ChairmanMemb. No.-080034
Sd/-Place : Jammu (MOHD. IMAM) JammuDate : 04.05.2009 Company Secretary 04.05.2009
J&KMDC Limited
105
Profit & Loss Account for the year ended 31st March, 2009(Rupees)
Schedule For the Year ended For the Year endedDescription No. 31st March, 2009 31st March, 2008
Income:Sales Nil 1,09,558
Other Income Nil 55,275
Accretion / (Decretion) to stock 10 Nil (1,09,223)
TOTAL Nil 55,610
Expenditure:
Sizing, sorting & transportation Nil Nil
Consumption of Stores & Spares Nil Nil
Electricity charges 20,232 21,355
Payments & Benefits to employees 11 13,64,423 10,73,878
Repairs & Maintenance 12 14,080 17,318
Royalty & Cess 8,63,823 1,69,855
Selling Expenses Nil 21,273
Other Expenses 13 6,35,143 5,99,243
Depreciation 2,705 Nil
Miscellaneous Expenditure written off 14 Nil Nil
TOTAL 29,00,406 19,02,922
Profit/(Loss) before prior Year items (29,00,406) (18,47,312)
Add/(Less) prior Year items Nil Nil
Profit/(Loss) before Taxes (29,00,406) (18,47,312)
Provision for Taxation - Earlier Years Tax 1,31,541 1,31,541
- Fringe Benefits Tax 10,908 1,42,449 8,697 1,40,238
Profit/(Loss) after tax (30,42,855) (19,87,550)
Loss brought forward from previous Year (9,51,94,961) (9,32,07,411)
Loss carried over to Balance Sheet (9,82,37,816) (9,51,94,961)
Detailed Information 15
Notes Forming Part of Accounts 16
Accounting Policies & Schedules 1 to 16 form part of Accounts.
In terms of our report of even date For and on behalf of Board
For VIJAYA GUPTA & CO.Chartered Accountants
Sd/- Sd/- Sd/- Sd/-(VIJAY GUPTA) (K.R. VENKATESWARLU) (N.K. NANDA) (RANA SOM)Proprietor Director Director ChairmanMemb. No.-080034
Sd/-Place : Jammu (MOHD. IMAM) JammuDate : 04.05.2009 Company Secretary 04.05.2009
J&KMDC Limited
106
Schedules
Schedule - 1 : Share Capital(Rupees)
Description As at As at31st March, 2009 31st March, 2008
Share Capital :
Authorised:10,00,000 Equity Shares of Rs.100 each 10,00,00,000 10,00,00,000
Issued:6,00,003 Equity shares of Rs.100 each 6,00,00,300 6,00,00,300
Subscribed & paid up:4,74,003 Equity shares of Rs.100 each 4,74,00,300 4,74,00,300
(includes 1,07,937 Shares for consideration
other than cash) (out of above shares issued
3,96,002 shares (previous year 3,96,002 shares)are held by Holding company i.e. M/s NMDC Ltd)
TOTAL 4,74,00,300 4,74,00,300
Shares yet to be subscribed and paid up by the Holding company (NMDC) is 48,000 shares of
Rs.100 each (previous year 48,000 shares of Rs.100 each) amounting to Rs.48,00,000/- (previous year
Rs.48,00,000/-) and other promoter M/S.JKML is 78,000 shares of Rs.100 each (previous year 78,000 shares
of Rs.100 each) amounting to Rs.78,00,000/- (previous year Rs.78,00,000/-).
J&KMDC Limited
107
Schedule - 2 : Fixed Assets(Rupees)
G R O S S B L O C K
Description Life As at Additions/ Deduction/ As at(Yrs) 31st March, Adjustments Adjustments 31st March,
2008 2009
Freehold Land – 66,43,544 66,43,544
Roads & Bridges 28 3,90,21,484 3,90,21,484
Building-Non Factory 29 9,15,501 9,15,501
Building-Factory 28 9,67,284 9,67,284
Plant & Machinery 7 Nil Nil
Heavy Mobile Equipment 7 Nil Nil
Electrical Installation 10 63,800 63,800
Vehicles 6 1,78,539 1,78,539
Furniture 10 2,36,673 2,36,673
Internal Communications 18 36,643 36,643
Other Assets 12 13,63,694 81,150 14,44,844
TOTAL 4,94,27,162 81,150 Nil 4,95,08,312
Figures for previous year 4,94,27,162 Nil Nil 4,94,27,162
D E P R E C I A T I O N N E T B L O C K
Description Upto For the Asset Prior Deduct- Upto As a t As at31st period impair- Period ion/Adjust- 3 1 s t 3 1 s t 31st
March, 2008 ment Adjustments ments March, 2009 March , 2009 March, 2008
Freehold Land Nil Nil Nil Nil 66 ,43 ,544 66,43,544
Roads & Bridges 3,90,21,484 Nil Nil 3 ,90 ,21 ,484 Nil Nil
Building-Non Factory 9,15,501 Nil Nil 9 ,15 ,501 Nil Nil
Building-Factory 9,67,284 Nil Nil 9 ,67 ,284 Nil Nil
Plant & Machinery Nil Nil Nil Nil Nil Nil
Heavy Mobile Equipment Nil Nil Nil Nil Nil Nil
Electrical installation 63,800 Nil Nil 63 ,8 0 0 Nil Nil
Vehicles 1,78,539 Nil Nil 1 ,78 ,539 Nil Nil
Furniture 2,36,673 Nil Nil 2 ,36 ,673 Nil Nil
Internal Communications 36,643 Nil Nil 36 ,6 4 3 Nil Nil
Other Assets 13,63,694 2,705 Nil 13 ,66 ,399 78 ,4 4 5 Nil
TOTAL 4,27,83,618 2,705 Nil Nil Nil 4,27 ,86 ,323 67 ,21 ,989 66,43,544
Figures for previous year 4,27,83,618 Nil Nil Nil Nil 42783618 66,43,544 66,43,544
J&KMDC Limited
108
Schedule - 3 : Capital Work in Progress(Rupees)
Description As at As at
31st March, 2009 31st March, 2008
Construction Work in Progress 14,92,114 14,92,114
Capital Assets in Stores awaiting/under
installation or in transit Nil Nil
14,92,114 14,92,114
Less : Provision 14,92,114 Nil 14,92,114 Nil
TOTAL Nil Nil
Schedule - 4 : Inventories (As valued and certified by the management)
(Rupees)
Description As at As at31st March, 2009 31st March, 2008
Stores & Spares Nil Nil
Finished goods 36,839 36,839
TOTAL 36,839 36,839
1. Basis of valuation of various items of Inventory is given in accounting policy.
Schedule - 5 : Cash and Bank Balances(Rupees)
Description As at As at31st March, 2009 31st March, 2008
Cash and Cheques on hand 15,444 7,011
Balance with Scheduled Banks
In Current Account :
State Bank of India, Jammu 1,22,545 1,16,082
Canara Bank, Jammu Nil Nil
Canara Bank, Hyderabad Nil Nil
TOTAL 1,37,989 1,23,093
J&KMDC Limited
109
(Rupees)
As at As at
Description 31st March, 2009 31st March, 2008
Advances recoverable in cash or
kind or for value to be received 3,759 13,471
Less : Provision for Bad & Doubtful Advances Nil 3,759 Nil 13,471
Advance Tax-Fringe Benefits Tax 10,168 8,697
Less : Provision for Fringe Benefits Tax 10,168 Nil 8,697 Nil
Deposits with others 1,550 1,550
TOTAL 5,309 15,021
Notes :
Particulars of Loans & Advances :
a) Loans considered good in respect of which :
i) The company is fully secured Nil Nil
ii) The company holds no security other
than the debtors’ personal security 5,309 15,021
b) Loans & advances considered doubtful
and provided for. Nil Nil
c) Amount due by Directors/ Officers:
i) Amount Due Nil Nil
ii) Maximum Amount Due at any time
during the year Nil Nil
Schedule - 7 : Current Liabilities(Rupees)
As at As atDescription 31st March, 2009 31st March, 2008
Sundry Creditors
Outstanding dues - micro enterprises &small enterprises Nil Nil
Outstanding dues - Other than micro
enterprises & small enterprises 21,02,847 21,02,847 20,84,588 20,84,588
Advance from Customers 29,085 29,085
Deposits from Suppliers, Contractors and Others 5,000 5,000
Other Liabilities (*) 5,22,55,587 4,94,86,226
TOTAL 5,43,92,519 5,16,04,899
(*) Includes amount due to Holding
Company (M/s.NMDC Limited) 5,21,60,881 4,94,44,770
Note: There are no transactions and outstandings in respect of micro enterprises & small enterprises.
Schedule - 6 : Loans and Advances
J&KMDC Limited
110
Schedule - 8 : Provisions(Rupees)
Description As at As at
31st March, 2009 31st March, 2008
Gratuity 1,75,385 1,77,394
Accrued Leave 1,64,169 1,67,167
Provision for taxation 26,10,202 24,78,661
Expenses 3,97,367 1,85,037
TOTAL 33,47,123 30,08,259
(Rupees)
Opening Adjustment Addition ClosingBalance during year during year Balance
Gratuity 1,77,394 33,023 31,014 1,75,385
(1,41,363) - (36,031) (1,77,394)
Accrued Leave 1,67,167 31,555 28,557 1,64,169
(1,32,642) - (34,525) (1,67,167)
Provision for taxation 24,78,661 - 1,31,541 26,10,202
(23,47,120) - (1,31,541) (24,78,661)
Expenses 1,85,037 1,44,314 3,56,644 3,97,367- - (1,85,037) (1,85,037)
TOTAL 30,08,259 2,08,892 5,47,756 33,47,123
Note : Figures in brackets indicates previous year figures.
J&KMDC Limited
111
Schedule - 9 : Miscellaneous Expenditure(to the extent not written off or adjusted)
(Rupees)
Description As at As at31st March, 2009 31st March, 2008
Preliminary Expenses Nil Nil
Feasibility Expenditure Nil Nil
Mine Development Expenditure Nil Nil
TOTAL Nil Nil
Schedule - 10 : Accretion / (Decretion) to Stock(Rupees)
Description For the Year ended For the Year ended31st March, 2009 31st March, 2008
FINISHED GOODS:
Balance as at close of the Year 36,839 36,839
Less : Balance as at the beginning of the Year 36,839 1,46,062
TOTAL Nil (1,09,223)
J&KMDC Limited
112
Schedule - 11 : Payments and Benefits to Employees(Rupees)
Description For the Year ended For the Year ended31st March, 2009 31st March, 2008
Salaries, Wages & Bonus 11,91,562 9,18,082
Contribution to PF, FPS & EDLI 81,354 63,864
Gratuity 52,457 53,832
Workmen and Staff welfare expenses 39,050 38,100
TOTAL 13,64,423 10,73,878
Schedule - 12 : Repairs and Maintenance(Rupees)
Description For the Year ended For the Year ended31st March, 2009 31st March, 2008
Plant & Machinery Nil Nil
Buildings Nil Nil
Vehicles 10,043 7,818
Others 4,037 9,500
TOTAL 14,080 17,318
J&KMDC Limited
113
(Rupees)
Description For the Year ended For the Year ended31st March, 2009 31st March, 2008
Rent 1,68,000 1,65,000
Insurance 4,177 4,259
Rates & Taxes 11,363 13,845
Payment to Auditors
As auditors:
Audit Fee 15,000 15,000
Out Of Pocket Expenses Nil 15,000 Nil 15,000
Miscellaneous Losses written off Nil Nil
Provision for other losses (reduction in value of Nil NilSub Station- Schedule-3)
Miscellaneous Expenses
Travelling & Conveyance 52,509 44,696
Postage, Telephone & Telex 36,721 35,510
Stationery & Printing 9,726 8,986
Consultancy Charges Nil Nil
Security Charges 2,17,383 1,87,272
P.O.L. for Personal Transport 22,906 21,613
Equipment/vehicle Running Exp. (Labour) Nil Nil
Others 97,358 1,03,062
4,36,603 4,01,139
TOTAL 6,35,143 5,99,243
Schedule - 13 : Other Expenses
J&KMDC Limited
114
(Rupees)
Description For the Year ended For the Year ended31st March, 2009 31st March, 2008
Preliminary Expenses Nil Nil
Feasibility Expenditure Nil Nil
Mine Development Expenditure Nil Nil
TOTAL Nil Nil
Schedule - 14 : Miscellaneous Expenditure Written Off
Schedule - 15 : Detailed Information1. Particulars of Licensed capacity, Installed capacity:
Details Licensed Capacity Installed Capacity
Raw Magnesite Ore (Sized) Not applicable 25,000 MT
2. Particulars of opening stock, actual production, sales & closing stock:
(Qty. in Metric Ton) (Value in Rs.)
Description Opening Stock Actual S a l e s Closing Stock
Qty Value Production Qty Value Qty Value
Raw Magnesite Ore 51 36,839 Nil Nil Nil 51 36,839(Sized) (171) (1,46,062) (Nil) (120) (1,09,558) (51) (36,839)
Notes: : Figures in brackets pertain to Previous Year.
3. Expenditure in foreign currency:
For the Year ended For the Year ended
31st March, 2009 31st March, 2008
(Rs.) (Rs.)
a. Consultancy charges Nil Nil
b. Others Nil Nil
4. Particulars of Consumption of Materials:
Value Percentage Value Percentage
Components & Spare Parts (Rs.) (Rs.)(including consumable stores)
a) Imported Nil Nil Nil Nilb) Indigenous Nil Nil Nil Nil
TOTAL Nil Nil Nil Nil
5. Foreign Exchange earnings: Nil Nil
J&KMDC Limited
115
6. Balance Sheet Abstract and Company’s General Business Profile:
I. Registration Details:
Registration No. 07-01110 of 1989 State Code-07
Balance Sheet Date 31-03-2009
II. Capital raised during the year:
Public Issue Rights Issue
Nil Nil
Bonus Issue Private Placement
Nil Nil
III. Position of Mobilisation and Deployment of Funds:
Total Liabilities Total Assets
10,51,39,942 10,51,39,942
Sources of Funds Paid-up Capital Reserve & Surplus
4,74,00,300 Nil
Secured Loan Unsecured Loan
Nil Nil
Application of Funds Net Fixed Assets Investments
67,21,989 Nil
Net Current Assets Misc. Expenditure
-5,75,59,505 Nil
Accumulated losses
9,82,37,816
IV. Performance of Company:
Turnover Total Expenditure
Nil 29,00,406
Profit Before Tax Profit After Tax
-29,00,406 -30,42,855
Earnings per Share
Nil
V. Generic Name of Principal Products ofthe Company (as per monetary terms):
Product Description
Schedule - 15 : Detailed Information (Contd..)
Raw Magnesite Ore(Sized)
J&KMDC Limited
116
1. Contingent liabilities
1.1 Claims against the Company not acknowledged as debts Rs.129.88 Lakhs (previous YearRs.125.85 Lakhs).
1.2 Estimated amount of Contracts remaining to be executed on capital account & not provided forRs. Nil (Previous year Rs. Nil).
2. Since the mining lease for Panthal Magnesite deposit was executed in the name of NMDC Ltd priorto the incorporation of the Company (which was valid upto 02.01.09 only), NMDC Ltd had submittedlease renewal application with Govt. of Jammu & Kashmir on 17.12.08 and also furnished anundertaking in the shape of Board Resolution for transfer of the same to J&KMDC Ltd. after its renewal.The renewal application is under active consideration of concerned departments of Govt. of J&K.Necessary action to get the lease transferred in the name of the Company will be taken in due course.
3. In pursuance of order of Income Tax Appellate Tribunal, Amritsar, the Company has made a provisionfor income Tax & interest thereon amounting to Rs. 26,10,202/- for the Assessment year -1991-92, 1992-93 and 1993-94 including Rs. 1,31,541/- provided for during the current Year.
4. The Board of Directors in 57th meeting held on 23.05.2002 have taken a decision to wind up theCompany subject to approval of Govt. of India and State Govt. of Jammu & Kashmir. Subsequently, itwas apprised to the Board in its 90th meeting held on 25.02.09 that revival plan is being finalized. Anupdated DPR for setting up of 100 TPD DBM Plant has been prepared by M/s. MECON, the consultants,which is under finalization. Expression of Interest for short listing competent parties for building andoperating the DBM plant was issued and the responses received are under active consideration. Inview of the above developments towards revival of the project, the accounts are prepared on “goingconcern” basis.
5. In compliance with AS-28, the Company provided for an impairment loss of Rs. 286.08 lakhs duringthe year 2005-06, to the extent of 100% of the book value of all assets except for the freehold land.The same was reviewed during the current year and no adjustment is considered necessary in thecurrent year accounts.
6. An amount of Rs.1,84,865/- was provided during 2000-01 towards amount payable to State PowerDevelopment Department of Jammu & Kashmir for construction of sub-station work at mine site, Panthal.No demand from the concerned authorities have, so far, been received in this regard.
7. Considering the past trend of continuous losses and future projections, no provision for the DeferredTax assets is being made as the same can not be realised as such in the foreseeable future.
8. Schedule and significant accounting policies form an integral part of these accounts.
9. Previous Year figures have been regrouped and rearranged where ever necessary, to make themcomparable with current Year figures.
10. Financial figures have been rounded off to nearest rupee.
Schedule - 16 : Notes Forming Part of Accounts
In terms of our report of even date For and on behalf of Board
For VIJAYA GUPTA & CO.Chartered Accountants
Sd/- Sd/- Sd/- Sd/-(VIJAY GUPTA) (K.R. VENKATESWARLU) (N.K. NANDA) (RANA SOM)Proprietor Director Director ChairmanMemb. No.-080034
Sd/-Place : Jammu (MOHD. IMAM) JammuDate : 04.05.2009 Company Secretary 04.05.2009
NMDC-CMDC Limited
117
First Annual Report2008-2009
NMDC-CMDC Limited(A subsidiary of NMDC Limited)
Regd. Office : “Angela Cottage”, H.No.3/883Civil Lines, Raipur, Chhattisgarh-492001
C O N T E N T SDirectors’ Report 118
Auditors’ Report 120
Balance Sheet 124
Profit & Loss Account 125
Schedules 126
Balance Sheet Abstract 132
NMDC-CMDC Limited
118
Directors’ Report for the year 2008 - 2009The Members
NMDC-CMDC Ltd (NCL)
Raipur.
On behalf of the Board of Directors, I take pleasure
in presenting the First Director's Report of your
Company, together with the Audit Report and Audited
Accounts, for the year ended 31st March 2009 and
the Report thereon by the Comptroller and Auditor
General of India.
1. Incorporation Status
The Company was incorporated on 19th June
2008 as a private l imited Company for
exploitation and development of Bailadila
Block Iron Ore deposit No-13 in joint venture
with NMDC Ltd and Chhattisgarh Mineral
Development Corporation Ltd. (CMDC). The
initial share ratio holding between NMDC and
CMDC is 51% and 49%. Accordingly, your
Company is a subsidiary Company of NMDC
Ltd and also falls under the definition of a
Government Company under the provisions of
the Companies Act, 1956.
2. Performance status
In respect of development of Block No.13,
Forest appl icat ion has been f i led on
15-10-2008 and the application has reached
the Nodal Off icer (FC Act) Govt. of
Chhattisgarh routed through DFO, Dantewada.
The said application has to be forwarded to
Ministry of Environment & Forest (MoEF), New
Delhi by the State Government for getting
stage-1 clearance. NIT to appoint MDO for
developing Dep.13 is prepared by NMDC
subject to the approval of NCL Board.
Additional area for setting up of infrastructure
(out of mining lease area ) such as loading,
crushing and screening plant etc is yet to be
identified and surveyed by seeking assistance
from NMDC and CMDC. EMP preparation work
is to be finalized by NMDC.
3. Share Capital:
The authorized share capital of the Company
is Rs.4.00 crores. The Company has issued
1500000 Equity Shares of Rs.10 each which
was subscribed fully by NMDC Limited, CMDC
Ltd and their nominees in the respective
ratios. Accordingly, the total paid up Equity
Share Capital of the Company as on 31st
March, 2009 stands at Rs. 1.5 crores.
4. Board of Directors: (as on 31st March, 2009)
The First Directors of the Company were
Shri. Rana Som, Dr. Uddesh Kohli ,
Shri. P.S.Upadhyaya, Shri. G.S. Agarwal,
Shri. P.K.Mishra, and Shri. P.S. Yadav.
During the year Dr. Uddesh Kohli ,
Shri. P.S.Upadhyaya and Shri. Shri. P.K.Mishra
ceased to be Directors of the Company.
Shri. S.K. Trivedi and Shri N.K. Nanda were
appointed as Additional Director on the Board.
5. Statutory Auditors
Comptroller & Auditor General of India (C&AG)
vide their letter dated 23.01.2009 has
communicated the appointment of M/s. DL
Goenka & Co., Raipur as the Statutory Auditors
of the Company for the financial year 2008-
2009. The members of the Company at their
Extra Ordinary General Meeting (EOGM) held
on 30-04-2009 has fixed the remuneration of
the Statutory Auditors of the Company M/s. DL
Goenka & Co., at Rs. 10,000/- (excluding
travel and out of pocket expenses) for the
financial year 2008-09.
The Statutory Auditors' Report on the accounts
of the Company for the year 2008-09 is at
Annexure-I, which forms part of this Report.
The Report of C & A G of India under Section
619(4) of the Companies Act, 1956 on the
Accounts of the Company for the year
2008-2009 are at Annexure-II, which forms
part of this Report.
NMDC-CMDC Limited
119
6. Directors' Responsibility Statement:
Pursuant to the requirement under Section
217(2AA) of the Companies Act, 1956, with
respect to Directors' Responsibility Statement,
it is hereby confirmed:
(i) That in the preparation of the accounts
for the financial year ended 31st March,
2009, the appl icable Accounting
Standards have been followed alongwith
proper explanation relating to material
departures;
(ii) That the Directors have selected
such accounting pol icies and
applied them consistently and made
judgments and estimates that were
reasonable and prudent so as to
give a true and fair view of the state
of affairs of the Company at the end
of the financial year and of the profit or
loss of the Company for the year under
review;
(iii) That the Directors have taken proper and
sufficient care for the maintenance of
adequate accounting records in
accordance with the provisions of the
Companies Act, 1956 for safeguarding
the assets of the Company and for
preventing and detecting fraud and other
irregularities;
(iv) That the Directors have prepared
the accounts for the financial year ended
31 March 2009 on a 'going concern'
basis.
7. Particulars of Employees under Section
217(2-A) of the Companies Act, 1956
Under the provisions of Section 217(2-A) of
the Companies Act, 1956 read with the
Companies (Particulars of the Employees)
Rules 1975, no employee of your Company
was in receipt of remuneration as prescribed
under the said rules.
8. Conservation of energy, technology
absorption, foreign exchange earnings and
outgo under Section 217(1)(e) of the
Companies Act, 1956.
Under the provisions of Section 217(1)(e) of
the Companies Act, 1956 read with the
Companies (Disclosure of particulars in the
Report of Board of Directors) Rules 1988, the
information regarding conservation of energy,
technology absorption, foreign exchange
earnings and out go concerning your
Company is 'NIL'.
9. Audit Committee
The provisions under Section 292A of the
Companies Act, 1956 regarding constitution of
the Audit Committee of the Directors is
presently not applicable to the Company.
10. Corporate Governance
The guidelines on Corporate Governance for
Central Public Sector Enterprises 2007 issued
by the Government of India, Department of
Public Enterprises under exemption to clause
5.3 states: 'For the purpose of these
guidelines, only those subsidiaries whose
turnover or net worth is not less than 20% of
the turnover companies.'
The Company is yet to commence commercial
operations and as such, the provisions of
the Corporate Governance on subsidiary
Companies is presently not appl icable
to NCL.
11. Acknowledgement:
The Directors gratefully acknowledge the
assistance, support and valuable guidance
given to your Company by Ministry of Steel,
Government of India, Government of
Chhattisgarh, NMDC Ltd, and Chhattisgarh
Mineral Development Corporation Ltd.
Sd/-Place : Hyderabad (Rana Som)Date : 11.06.2009 Chairman
NMDC-CMDC Limited
120
To,The MembersM/s. NMDC-CMDC LimitedRaipur (C.G.)
1. We have audited the attached Balance Sheetof NMDC-CMDC LIMITED (The Company),CIVIL LINES, RAIPUR (C.G.), as at 31st March2009 and the Profit and Loss Account for theperiod ended on that date, annexed thereto.These f inancial statements are theresponsibility of the company's management.Our responsibility is to express an opinion onthese financial statements based on our audit.
2. We conducted our audit in accordance withthe auditing standards generally accepted inIndia. Those Standards require that we planand perform the audit to obtain reasonableassurance about whether the f inancialstatements are free of material misstatement.An audit includes examining, on a test basis,evidence support ing the amounts anddisclosures in the financial statements. Anaudit also includes assessing the accountingprinciples used and signif icant estimatesmade by management, as well as evaluatingthe overall financial statement presentation.We bel ieve that our audit provides areasonable basis for our opinion.
3. As required by the Companies (Auditor'sReport) Order, 2003 issued by the CentralGovernment of India in terms of sub-section(4A) of Section 227 of the Companies Act,1956 we enclose in the Annexure a statementon the matters specified in paragraphs 4 & 5of the said Order, to the extent applicable.
4. Further to our comments in the Annexurereferred to above, we report that :
(a) We have obtained all the information andexplanations, which to the best of ourknowledge and belief were necessary forthe purposes of our audit;
(b) In our opinion, proper books of accountas required by law have been kept by the
Auditors’ Reportcompany so far as appears from ourexamination of those books;
(c) The Balance Sheet, Profit & Loss Accountdealt with by this report are in agreementwith the books of accounts;
(d) In our opinion the Balance Sheet andProfit and Loss Account dealt with by thisreport comply with the accountingstandards referred to in section 211(3C)of the Companies Act, 1956;
(e) The company has informed thatdepartment of company affairs videnoti f icat ion no. GSR829(E) dtd.21.10.2003 notified that section 274(1)(g)of the Companies Act, 1956 is notapplicable to the GovernmentCompanies. Hence clause regardingdisqual i f icat ion of directors is notapplicable;
(f) In our opinion and to the best of ourinformation and according to theexplanations given to us, the saidaccounts read with the signif icantaccounting policy and notes forming partof accounts appearing in Schedule No.9 give the information required by theCompanies Act, 1956, in the manner sorequired and give a true and fair view inconformity with the accounting principlesgenerally accepted in India:
(i) in the case of the Balance Sheet, ofthe state of affairs of the companyas at 31st March, 2009;
(ii) in the case of the Profit and LossAccount, of the LOSS for the periodfrom 19.06.2008 to 31.03.2009.
For D. L. Goenka & Co.,Chartered Accountants
Sd/-Place : Raipur (D. L. Goenka)Dated : 29.05.2009 Proprietor
Annexure - I
NMDC-CMDC Limited
121
(i) In respect of Fixed Assets :
(a) The company was not required tomaintain proper records showing fullparticulars including quantitative, asthere was no manufacturing or tradingactivi ty during the period (from19.06.2008 to 31.03.2009) but hasmaintained proper records showing fullparticulars of fixed assets.
(b) In our opinion, the fixed assets havebeen physical ly veri f ied by themanagement at reasonable intervals,having regard to the size of the companyand the nature of its assets. No materialdiscrepancies were noticed on suchphysical verification.
(c) That no fixed assets have been disposedoff during the year, therefore, theprovisions of clause 4(i)(c) of theCompanies (Auditor's Report) Order,2003 are not applicable to the company.
(ii) In respect of Inventories :
(a) As explained to us by the managementthat there was no inventory, as there wasno manufacturing or trading activitiesduring the period ended on 31st March2009 hence no comment on this point.
(b) In our opinion and according to theinformation and explanations given to us,no procedure of physical verification ofinventory was fol lowed by themanagement, as there was nomanufacturing or trading activities duringthe period ended on 31st March 2009,hence no comment on this point.
(c) In our opinion and according to theinformation and explanation given to us,the Company was not required tomaintain proper records of its inventoriesas there was no manufacturing ortrading activities during the period endedon 31st March 2009 hence no commenton this point.
Annexure to the Auditors’ Report(Referred to in paragraph 3 of our report of even date)
(iii) According to the information and explanationsgiven to us, the company has neither grantednor taken any loans secured or unsecured to/from companies, firms or other parties coveredin the register maintained under section 301of the Companies Act, 1956, hence clauseiii (a, b, c, d, e, f and g) are not applicable.
(iv) In our opinion and according to the informationand explanations given to us, no adequateinternal control procedures commensuratewith the size of the company and the natureof its business was required, as there was nomanufacturing and trading activities during theperiod ended on 31st March 2009, hence nocomment on this point.
(v) According to the information and explanationsgiven to us, the company has not entered intoany transactions with any of the parties aslisted in the register maintained under section301 of the Companies Act, 1956, therefore, theprovisions of clause 4(v)(a) & 4(v)(b) of theCompanies (Auditor's Report) Order, 2003 arenot applicable to the company.
(vi) In our opinion and according to the informationand explanation given to us, the company hasnot accepted any deposits from public duringthe year, therefore, the provisions of section58A and 58AA of the Companies Act, 1956 andthe Companies (Acceptance of Deposits)Rules, 1975 are not applicable to the company.
(vii) In our opinion, the company was not requiredan internal audit system, as there was nomanufacturing or trading activities during theperiod ended on 31st March 2009 hence nocomment on this point.
(viii) The Central Govt. has not prescribedmaintenance of cost records under section209(1)(d) of the Companies Act, 1956. Asthere was no manufacturing activities duringthe period ended on 31st March 2009,therefore, the provisions of clause 4(viii) ofthe Companies (Auditor's Report) Order,2003 is not applicable to the company.
NMDC-CMDC Limited
122
(ix) In respect of statutory dues :
(a) According to the information andexplanations given to us and the recordsof the Company examined by us, thecompany is regular in depositing withappropriate authorities undisputedstatutory dues i.e. incometax (TDS) andother statutory dues applicable to it.Employees' state insurance, sales tax,wealth tax, custom duty, excise duty, cessetc. are not applicable.
(b) According to the information andexplanations given to us, no undisputedamounts payable in respect of incometax, wealth tax, sales tax, service tax,customs duty, excise duty and cesswere in arrears, as at 31st March, 2009.
(x) This is the first year of the company hencequestion of accumulated loss does not arise,however the company has incurred lossduring the period ended on 31st March 2009covered by our audit.
(xi) In our opinion and according to theinformation and explanations given to us, thecompany has not taken any loan from thefinancial institution, bank and has not issuedany debentures. Therefore the provisions ofclause 4(xi) of the Companies (Auditor'sReport) Order, 2003 are not applicable to theCompany.
(xii) In our opinion and according to theinformation and explanations given to us, thecompany has not granted loans andadvances on the basis of security by way ofpledge of shares, debentures and othersecurit ies. Accordingly the provisions ofclause 4(xii) of the Companies (Auditor'sReport) Order, 2003 are not applicable to theCompany.
(xiii) In our opinion, the company is not achit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause4(xiii) of the Companies (Auditor's Report)Order, 2003 are not appl icable to thecompany.
(xiv) In our opinion, the company is not dealingin or trading in shares, securi t ies,debentures and other investments.Accordingly, the provisions of clause 4(xiv) of
the Companies (Auditor's Report) Order,2003 are not applicable to the company.
(xv) According to the information andexplanations given to us, the company hasnot given any guarantee for loans taken byothers from banks or financial institutions.
(xvi) According to the information andexplanations given to us, the company hasnot obtained any term loans. Therefore, theprovision of clause 4(xvi) of the Companies(Auditor 's Report) Order, 2003 are notapplicable to the company.
(xvii) According to the information andexplanations given to us and on an overallexamination of the balance sheet of thecompany, we report that no funds were raisedon short-term basis, hence no comment.
(xviii) According to the information andexplanations given to us, the companyhas not made preferential al lotment ofshares to the part ies and companiescovered in the register maintained u/s. 301of The Act. Accordingly, the provisions ofclause 4 (xviii) of the Companies (Auditor'sReport) Order, 2003 are not applicable to thecompany.
(xix) According to the information andexplanations given to us, the company hasnot issued any debentures, therefore, theprovisions of clause 4(xix) of the Companies(Auditor 's Report) Order, 2003 are notapplicable to the company.
(xx) According to the information andexplanations given to us, the company hasnot raised any money by public issue duringthe period. Accordingly the provisions ofclause 4(xx) of the Companies (Auditor'sReport) Order, 2003 are not applicable to thecompany.
(xxi) According to the information andexplanations given to us, no fraud on or bythe company has been noticed or reportedduring the course of our audit.
For D. L. Goenka & Co.,Chartered Accountants
Sd/-Place : Raipur (D. L. Goenka)Dated : 29.05.2009 Proprietor
NMDC-CMDC Limited
123
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDERSECTION 619(4) OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF
NMDC-CMDC LIMITED, RAIPUR FOR THE YEAR ENDED ON 31 MARCH 2009.
The preparation of financial statements of NMDC-CMDC Limited, Raipur for the year ended
on 31 March 2009 in accordance with the financial reporting framework prescribed under
the Companies Act, 1956 is the responsibility of the management of the company. The Statutory
Auditor appointed by the Comptroller and Auditor General of India under section 619(2) of
the Companies Act, 1956 is responsible for expressing opinion on these financial statements
under Section 227 of the Companies Act, 1956 based on independent audit in accordance
with the Auditing and Assurance Standards prescribed by their professional body the Institute
of Chartered Accountants of India. This is stated to have been done by them vide their Audit
Report dated 29 May 2009.
I, on behalf of Comptroller and Auditor General of India, have decided not to review the report
of Statutory Auditor on the accounts of NMDC-CMDC Limited, Raipur for the year ended on
31 March 2009 and as such have no comments to make under 619(4) of the Companies
Act, 1956.
For and on the behalf of theComptroller and Auditor General of India.
Roy MathraniPrincipal Director of Commercial Audit &
Ex-Officio Member, Audit Board,Hyderabad.
Annexure - II
Place : HyderabadDate : 11 June 2009
NMDC-CMDC Limited
124
Balance Sheet as at 31st March, 2009(Rupees)
Particulars Schedule Amount Previous Year
SOURCES OF FUNDS :
Shareholder’s Fund
Share Capital 1 15,000,000.00 –
Reserves & Surplus 2 (1,284,345.00) –
Loan Fund 3 – –
TOTAL 13,715,655.00 –
APPLICATION OF FUNDS :
Fixed Assets 4
Gross Block 189,132.00
Less : Depreciation 2,846.00 –
Net Block 186,286.00
Investments – –
Current Assets, Loans & Advances
(a) Sundry Debtors – –
(b) Cash & Bank Balances 5 13,855,097.00 –
(c) Loans & Advances 6 73,271.00 –
13,928,368.00 –
Less : Current Liabilities & Provisions 7 398,999.00 –
Net Current Assets 13,529,369.00 –
Miscellaneous Expenditure
(to the extent not W/Off) – –
TOTAL 13,715,655.00 –
For NMDC-CMDC Limited As per our report of even date
For D.L. GOENKA & COChartered Accountants
Sd/- Sd/- Sd/- Sd/-(RANA SOM) (P. JOY OOMMEN) (ARUN K. SHUKLA) (D.L. GOENKA)
Chairman Director CEO Proprietor
Place : New Delhi RaipurDate : 29.05.2009 29.05.2009
NMDC-CMDC Limited
125
Profit & Loss Account for the period from 19.06.2008 to 31.03.2009
(Rupees)
Particulars Schedule Amount Previous Year
INCOME: – –
TOTAL – –
EXPENDITURE:
Administrative & Other Exp. 8 1,275,939.00 –
TOTAL 1,275,939.00 –
Profit/(Loss) before Depreciation (1,275,939.00) –
Less : Depreciation 2,846.00 –
Profit/(Loss) before Taxation (1,278,785.00) –
Fringe Benefit Tax (A.Y.09-10) 5,560.00 –
Net Profit/(Loss) after Taxation (1,284,345.00) –
Notes on Accounts 9
For NMDC-CMDC Limited As per our report of even date
For D.L. GOENKA & COChartered Accountants
Sd/- Sd/- Sd/- Sd/-(RANA SOM) (P. JOY OOMMEN) (ARUN K. SHUKLA) (D.L. GOENKA)
Chairman Director CEO Proprietor
Place : New Delhi RaipurDate : 29.05.2009 29.05.2009
NMDC-CMDC Limited
126
Schedules
Schedule - 1 : Share Capital(Rupees)
Particulars Amount Previous Year
AUTHORISED CAPITAL
40,00,000 Equity Shares of Rs.10/- each 40,000,000.00 –
TOTAL 40,000,000.00 –
ISSUED, SUBSCRIBED & PAID-UP EQUITY SHARES
15,00,000 Equity Shares of Rs.10/- each fully paid 15,000,000.00 –
TOTAL 15,000,000.00 –
Schedule - 2 : Reserves & Surplus(Rupees)
Particulars Amount Previous Year
Profit & Loss A/c.
Opening Balance – –
Profit/(Loss) for the year (1,284,345.00) –
TOTAL (1,284,345.00) –
Schedule - 3 : Loan Fund(Rupees)
Particulars Amount Previous Year
(a) Secured Loans – –
(b) Unsecured Loans – –
TOTAL – –
NMDC-CMDC Limited
127
Schedule - 4 : Fixed Assets(Rupees)
G R O S S B L O C K
Assets Cost as on Additions/Deductions Total cost01.04.2008 during the year as on 31.03.2009
1. FURNITUREComputer Table 11.11.2008 – 5,005.00 5,005.00Computer Chair 12.11.2008 – 3,599.00 3,599.00Almirah & Tables 01.03.2009 – 20,191.00 20,191.00Almirah 13.03.2009 – 9,322.00 9,322.00Room Cooler 14.03.2009 – 5,600.00 5,600.00
TOTAL (A) – 43,717.00 43,717.00
2. ELECTRICAL EQUIPEMENTSAir Conditioner 29.10.2008 – 29,800.00 29,800.00Mobile Cell Phone 29.10.2008 – 9,100.00 9,100.00Water DispencerMachine (Voltas) 30.03.2009 – 8,325.00 8,325.00OFFICE APPLIANCES
3. Photocopier Machine(Canon) 06.01.2009 – 59,040.00 59,040.00
4. COMUTER MACHINEHCL Desktop PC 06.11.2008 – 39,150.00 39,150.00
TOTAL (B) – 145,415.00 145,415.00
TOTAL ( A + B) – 189,132.00 189,132.00
D E P R E C I A T I O N N E T B L O C K
Assets Rate as per Upto For the Total upto As on As onSchedule 31.03.2008 Year 31.03.2009 31.03.2009 31.03.2008
XIV 9SLM)
1 . F U R N I T U R EC o m p u t e r Ta b l e 11 .11 .2008 6.33 – 132.00 132.00 4,873.00 –Computer Chair 12.11.2008 6.33 – 95.00 95.00 3,504.00 –Almirah & Tables 01.03.2009 6.33 – 107.00 107.00 20,084.00 –Almirah 13.03.2009 6.33 – 49.00 49.00 9,273.00 –Room Cooler 14.03.2009 6.33 – 30.00 30.00 5,570.00 –TOTAL ( A ) – 413.00 413.00 43,304.00 –
2 . E L E C T R I C A L E Q U I P E M E N T SAir Condi t ioner 29.10.2008 4.75 – 708.00 708.00 29,092.00 –
Mobi le Cel l Phone 29.10.2008 4.75 – 216 216.00 8,884.00 –Water DispencerMachine (Vol tas) 30.03.2009 4.75 – 33.00 33.00 8,292.00 –O F F I C E A P P L I A N C E S
3 . Photocopier Machine(Canon) 06.01.2009 4.75 – 701.00 701.00 58,339.00 –
4 . C O M PU T E R M A C H I N EHCL Desktop PC 06.11.2008 4.75 – 775.00 775.00 38,375.00 –TOTAL ( B ) – 2,433.00 2,433.00 142,982.00 –
TO TAL ( A + B ) – 2,846.00 2,846.00 186,286.00 –
NMDC-CMDC Limited
128
Schedule - 5 : Cash & Bank Balances(Rupees)
Particulars Amount Previous Year
Cash in hand – –
Bank Balance withAxis Bank, Raipur 13,855,097.00 –
TOTAL 13,855,097.00 –
Schedule - 6 : Loans & Advances(Rupees)
Particulars Amount Previous Year
Advances recoverable in cash or in kind
From Officers
1 Mr. A.K.Shukla (CEO) 20,000.00 –
2 Departmental Advance 5,717.00 –
From Others
3 Guest House Rent Advance 44,000.00 –
4 Shri Brajesh R.Agrawal (C.S.) (TDS) 3,554.00 –
TOTAL 73,271.00 –
NMDC-CMDC Limited
129
(Rupees)
Particulars Amount Previous Year
OTHER LIABILITIES1 M/s. D.L.Goenka & Co., Raipur 10,000.00 –2 For Telephone Expenses 3,272.00 –
3 NMDC Limited, Hyderabad 376,613.00 –4 TDS Payable 3,554.00 –
5 Fringe Benefit Tax Payable 5,560.00 –
TOTAL 398,999.00 –
Schedule - 8 : Administrative & Other Expenses(Rupees)
Particulars Amount Previous Year
1 Payment to OfficersSalary & Allowances 336,231.00 –
2 Contribution to Providend Fund 31,692.00 –
3 Payment to Consultants 266,700.00 –4 Salary to Office Assistants 28,800.00 –
5 Travelling Expenses (Officer) 208,056.00 –6 Hire Charges of Vehicles 158,151.00 –
7 Guest House Rent 132,000.00 –
8 Telephone Charges 29,757.00 –9 Legal Expenses 3,870.00 –
10 Repairs & Maintenance 3,794.00 –Auditor's Remuneration
11 Audit Fees 10,000.00 –
12 Other Misc. Expenses 30,342.00 –13 Printing & Stationery 21,526.00 –
14 Books & Periodicals 2,434.00 –15 Postage Expenses 396.00 –
16 Mining Lease Application Fee 3,500.00 –
17 BOD Meeting Expenses 8,690.00 –
TOTAL 1,275,939.00 –
As per our report of even date
For D. L. Goenka & Co.,Chartered Accountants.
Sd/-Place : Raipur (D. L. Goenka)Dated : 29.05.2009 Proprietor
Schedule - 7 : Current Liabilities & Provisions
NMDC-CMDC Limited
130
SIGNIFICANT ACCOUNTING POLICIES :
A. BASIS OF ACCOUNTING :
The company prepares its financial statements as a going concern under historical cost conventionand on accrual basis, in accordance with the generally accepted accounting principles.
B. BALANCE SHEET
1. FIXED ASSETS:
1.1 These are stated At Historical Cost.
1.2 Assets acquired are capitalized to the extent of cost to the company.
2. DEPRECIATION :
2.1 Depreciation is charged on straight-l ine method. The rates are equal to those prescribed inSchedule - XIV.
2.2 Depreciation is charged on pro-rata monthly basis on additions of the assets during the year taking
the 1st day of the month for acquisition.
3. INVESTMENTS :
There are no investments.
4. INVENTORIES :
No inventories, hence no comment.
5. EXPENDITURE :
5.1 Recognition of Income & Expenditure :
Items of Income & Expenditure are recognised on accrual basis.
NOTES ON ACCOUNTS :
1. Contingent Liabilities not provided for
(a) Claims against the Company not acknowledged as debts – NIL
(b) Estimated amount of contracts remaining to be executed
on capital account and not provided for – NIL
(c) Uncalled liability on equity shares – NIL
(d) Other money for which the company is contingently liable – NIL
2. Information pursuant to the provision of paragraph 3 & 4 of para II of Schedule VI of CompaniesAct, 1956.
(a) Since this is the first year of the company, the company has not manufactured anything duringthe period ended on 31.03.2009, no question of giving quantitative details in respect of opening
& closing stock, production and sales.
(b) Remuneration to Director
No Remuneration given to any Director - NIL
Schedule - 9 : Accounting Policies & Notes on Accounts
NMDC-CMDC Limited
131
3. Event occurring after Balance Sheet date :
As explained there is no such 'Event occurring after Balance Sheet date', which is of material value.
4. Since this is the first accounting year, no previous year figures is required to be given.
For NMDC-CMDC Limited As per our report of even date
For D.L. GOENKA & COChartered Accountants
Sd/- Sd/- Sd/- Sd/-(RANA SOM) (P. JOY OOMMEN) (ARUN K. SHUKLA) (D.L. GOENKA)
Chairman Director CEO Proprietor
Place : New Delhi RaipurDate : 29.05.2009 29.05.2009
NMDC-CMDC Limited
132
Part - IVBalance Sheet Abstract and Company’s General Business Profile :
I. Registration details :
Registration No. State Code
Balance Sheet Date
II. Capital raised during the Year (Amount in Rs.)
Public Issue Rights issue
Bonus issue Private Placements
III. Position of mobilization and deployment of funds (Amount in Rs.)
Total Liabilities Total Assets
Source of funds :Paid-up Capital Reserves & Surplus
Secured Loans Unsecured Loans
Application of funds :Net Fixed Assets Investments
Net Current Assets Misc. Expenditure
Accumulated Losses
IV. Performance of Company (Amount in Rs.)
Turnover Total Expenditure
Profit before tax Profit after tax
Earnings per share in Rs. Dividend Rate %
V. Generic name of the principal products/services of company :(as per monetary terms) (Not Applicable)
Item Code No (ITC Code)
Product Description
Item Code No (ITC Code)
Product Description
Item Code No (ITC Code)
Product Description
2 0 7 1 1 1 0
3 1 0 3 0 9
1 5 0 0 0 0 0 0
N I L
3 9 8 9 9 9
N I L
N I L
1 4 1 1 4 6 5 4
1 5 0 0 0 0 0 0 - 1 2 8 4 3 4 5
N I L N I L
1 8 6 2 8 6
1 3 5 2 9 3 6 9
N I L
N I L
N I L
N I L 1 2 7 5 9 3 9
- 1 2 7 8 7 8 5 - 1 2 8 4 3 4 5
N I L N I L
133
NMDC - SARL
NMDC SARLVilla No.2, Cite Sarda Les Peches, Antanimora
BP 3791, Antananarivo 101, Madagascar
Director’s Report on Annual Accountsfor Financial Year 2007-2008 134
Balance Sheet 135
C O N T E N T S
Annual Report2007-2008
NMDC - SARL
134
Directors’ Report on the Annual Accountsfor Financial Year ended 30th June 2008
ToShareholders,NMDC SARL
Dear Shareholders
The NMDC SARL (a Wholly Owned Subsidiary of
NMDC) is a Company registered under Malagasy
right having a registered capital of 5,000,000 FMG
(Five million Malagasy Francs). Its main activity is
prospecting, explorat ion and exploitat ion of
high value mineral deposits in Madagascar.
The Company had suspended i ts operation
from March 2002 due to disturbed political situation
in the country and also due to poor exploration
results.
In view of the above, NMDC took a decision to wind
up NMDC SARL. The process of winding up is on
hand. There have been no transactions after March
2002.
Accordingly no transaction has been incurred for the
financial year ended on 30th June 2008. Hence only
the Balance Sheet has been prepared.
Sd/-S Venkatesan
Director - Manager
135
NMDC - SARL
Balance Sheet as at 30th June, 2008
Amount in FMG
ASSETS F.Y. F.Y.
2007-2008 2006-2007
I. FIXED ASSETS
Establishment expenses 738,992,217 738,992,217
Gold Research Expenses 3,081,369,115 3,081,369,115
3,820,361,332 3,820,361,332
CORPOREAL ASSETS
Equipment & Tools 0 0
Vehicles 0 0
Office Equipment & Office furniture 0 0
Computer Equipment 0 0
Office & Accommodation Furniture 0 0
0 0
TOTAL OF FIXED ASSETS 3,820,361,332 3,820,361,332
II. RUNNING ASSETS
DEBTS
* VAT Credit 0 0
* Prepaid advance for company tax profit (IBS) 0 0
* Other Debts 0 0
LIQUID ASSETS
* Bank 0 0
* Cash 0 0
0 0
TOTAL OF RUNNING ASSETS 0 0
III. EARLY NOTED CHARGES
* Advances 0 0
TOTAL GENERAL (I + II + III) 3,820,361,332 3,820,361,332
NMDC - SARL
136
Balance Sheet as at 30th June, 2008
Amount in FMG
LIABILITIES F.Y. F.Y.
2007-2008 2006-2007
I. EQUITY CAPTAL
Issued Capital:
2,000 shares of stock 2500 FMG each 5,000,000 5,000,000
Result pending for affectation (5,584,099,270) (5,584,099,270)
Result of the F.Y.: Net Loss (2,402,324,250) (2,402,324,250)
Net situation (7,981,423,520) (7,981,423,520)
II. DEBTS
Suppliers and related accounts 0 0
OTHER DEBTS
Shareholders - operations on the capital 11,801,784,852 11,801,784,852
TOTAL OF DEBTS 11,801,784,852 11,801,784,852
GRAND TOTAL (I + II) 3,820,361,332 3,820,361,332
Sd/-(S Venkatesan)
Director - Manager
137
NAM-India MDC (PTY) Ltd
Nam-India Mineral Development Corporation (Pty) LimitedWindhoek, Namibia.
(Registration No. 2001/039)
C O N T E N T S
Statement of Responsibility by the Director 138
Auditors’ Report 139
Director’s Report 140
Balance Sheet 142
Income Statement 143
Statement of Changes in Equity 144
Cash Flow Statement 145
Significant Accounting Policies 146
Notes to Financial Statements 147
Annual Report2008-09
NAM-India MDC (PTY) Ltd
138
Statement of Responsibility by the Directorfor the year ended 31st March, 2009
The Director is responsible for the preparation,
integrity and fair presentation of the f inancial
statements of Nam India Mineral Development
Corporation (Pty) Ltd. The financial statements have
been prepared in accordance with International
Financial Reporting Standards and in the manner
required by the Companies Act in Namibia.
No activities were taken up during the accounting
year in view of the decision of the parent company
to voluntarily wind up the subsidiary. The company
has applied for deregistration with the Registrar of
Companies, Windhoek. The bank accounts have
also been closed.
The director is also liable for the company’s system
of internal financial control. These are designed to
provide reasonable, but not absolute, assurance as
to the reliability of the financial statements and to
adequately safeguard, veri fy and maintain
accountability of the assets, and to prevent and
detect misstatement and loss. The director is
responsible for all the information provided in these
financial statements for both its accuracy and
consistency.
The financial statements have been audited by the
independent auditors, PricewaterhouseCoopers,
which was given unrestricted access to all financial
records and related data. The report of the
independent auditors is presented on page 139.
The financial statements set out in pages 140 to
151 were approved and authorized for issue by the
director on 31-March-2009.
Sd/-Place : Hyderabad (Kumar Raghavan)Date : 31-March-2009 Director
139
NAM-India MDC (PTY) Ltd
NAM-India MDC (PTY) Ltd
140
The Director presents his report which forms part
of the financial statements of the company for the
year ended 31 March 2009.
Transition to International Financial Reporting
Standards (IFRS).
As at the end of previously reported financial year,
the company prepared its financial statements in
accordance with Namibian Statements of Generally
Accepted Accounting Practice. As a result of
preparing financial statements in accordance with
Namibian Statements of General ly Accepted
Accounting Practice (GAAP), the company has
effectively applied the text of International Financial
Report ing Standards (IFRS), due to the
harmonization of Namibian GAAP with IFRS from 1
January 2005.
Effective 1 April 2008, the company adopted IFRS
as the basis of preparing financial statements. The
date of transition to IFRS is thus 1 April 2007, which
is the date of opening balance sheet of the
comparative information presented. The company
did not use any of exemptions in IFRS 1: First-time
Adoption of International Financial Report ing
Standards during conversion process and no
reconciliation is thus required between the amounts
previously reported under Namibian GAAP and
IFRS.
The International Financial Reporting Standards
applied are those issued by the International
Accounting Standards Board as at 31 March
2009, including the interpretat ions issued by
the International Financial Report ing
Interpretations Committee (IFRIC) as applicable to
the company.
General Review
The company is a wholly owned subsidiary of
NMDC Limited, having its registered off ice at
Hyderabad, India. The Board of Directors of
the holding company, in its 383rd meeting held
on 26-May-2005 had decided to wind up the
subsidiary company at Namibia in view of
economic un-viability of operations at Namibia. The
parent company has also received the approval
of the Ministry of Steel, Govt. of India and
Reserve Bank of India for closure of the
subsidiary company. Consequently, the company
has appl ied for voluntary winding up and
deregistrat ion effect ive from 1st Apri l 2009
with the Ministry of Revenue, Republic of
Namibia through M/s. Pricewaterhousecoopers,
who are the Secretaries of the Company at
Windhoek and has also closed the bank accounts
at Namibia.
Activities & Financial Results
No activities were undertaken in the financial year
2008-09. The financial results during the year under
report are set on pages 142 to 151. The net
expenditure incurred during the year has been
added to the accumulated loss at the beginning of
the year. There are no creditors and other liabilities
on the last day of the accounting year other than
unsecured loan from the parent company.
Share Capital
There was no change in the authorized and issued
share capital during the year.
Loan from the holding company
The entire expenditure of the company has been
met out of the Interest-free unsecured Loan from
the holding company. During the year the
administrative expenses were met out of further
loan received from the holding company. As no
revenue was generated by the company during the
period of operation in Namibia, the loan amount
could not be repaid to the parent company. The
parent company has written off the total amount of
Loan as unrecoverable.
Director’s Report for the year ended 31st March, 2009
141
NAM-India MDC (PTY) LtdHolding company
The company is a wholly owned subsidiary of the
holding company, NMDC Limited, (formerly National
Mineral Development Corporation Limited), a
Government of India undertaking, having i ts
registered office at Hyderabad, India.
Directors
The sole Director of the company is:
Mr. Kumar Raghavan
Mr. Kumar Raghavan was appointed Director with
effect from 30 October 2008 in place of Mr. K V V
Sastry who resigned on 31 August 2008.
Secretaries
During the year 2008-09, PricewaterhouseCoopers
Services Tax and Advisory Services (Pty) Ltd,
whose address is given below, have rendered
secretarial administrat ion and tax compliance
services.
Business Address:
Third Floor,
344, Independence Avenue
Windhoek, Namibia
Postal Address:
P.O Box 1571
Windhoek
Namibia
Auditors
During the year 2008-09, PricewaterhouseCoopers,
Windhoek were reappointed auditors of the
company and will continue in office in accordance
with section 270(2) of the Companies Act.
Sd/-Place : Hyderabad (Kumar Raghavan)Date : 31-March-2009 Director
NAM-India MDC (PTY) Ltd
142
Balance Sheet as at 31st March, 2009(Nam Dollars)
Schedule As at As at31st March 2009 31st March 2008
ASSETS
Non-current Assets
Gross Block 1 – 3,190
Less : Accumulated Depreciation – 2,320
Net Block – 870
Current Assets
Cash & Cash Equivalents 2 – 10,118
Receivables & advances – –
– 10,118
Total Assets – 10,988
EQUITY AND LIABILITIES
Capital and Reserves
Share Capital 3,967 3,967
Less : Accumulated losses (3,967) (2,136,268)
– (2,132,301)
Non-current Liabilities
Long term loans – –
Current Liabilities
Interest-free Unsecured Loan 3 – 2,133,522from Parent Company
Outstanding Expenses – – 9,767 2,143,289
Total equity and liabilities – 10,988
Sd/- Sd/-(B. Govinda Rao) (Kumar Raghavan)
Asst. General Manager (Finance) Director
Place : HyderabadDate : 31-Mar-2009
143
NAM-India MDC (PTY) Ltd
(Nam Dollars)
Notes For the year ended For the year ended31st March 2009 31st March 2008
REVENUE
Unsecured interest-free Loan from Parent Company 2,514,672 –
written up as not payable
EXPENDITURE
Consumption of stores & spares – –
Power – –
Payments & Benefits to employees – –
Repairs & Maintenance – –
Exploratory works – –
Other expenses 5 384,402 277,820
Depreciation 1 158 158
TOTAL 384,560 277,978
Operating income/(Loss) before finance items 2,130,112 (277,978)
Finance Items 4 2,189 205
Net Income/(Loss) 2,132,301 (277,773)
Sd/- Sd/-(B. Govinda Rao) (Kumar Raghavan)
Asst. General Manager (Finance) Director
Place : HyderabadDate : 31-Mar-2009
Income Statement for the year ended 31st March, 2009
NAM-India MDC (PTY) Ltd
144
(Nam Dollars)
Share Accumulated TotalCapital Losses
At 31 March 2009
Authorised:
4,000 Ordinary Shares of N$.1/- each 4,000 4,000
Issued:
Balance as at 1st April 2008: 3,967 – 3,967
3967 Ordinary Shares of N$ 1/- each
Accumulated Losses as at 1st April 2008 – (2,136,268) (2,136,268)
Income/(Loss) during the year – 2,132,301 2,132,301
Balance as at 31st March 2009: 3,967 (3,967) –
3967 Ordinary shares of N$ 1/- each
At 31 March 2008
Authorised:
4,000 Ordinary Shares of N$.1/- each 4,000 4,000
Issued:
Balance as at 1st April 2007: 3,967 – 3,967
3967 Ordinary Shares of N$ 1/- each
Accumulated losses as at 1st April 2007 – (1,858,495) (1,858,495)
Income/(Loss) during the year – (277,773) (277,773)
Balance as at 31st March 2008: 3,967 (2,136,268) (2,132,301)
3967 Ordinary shares of N$ 1/- each
Sd/- Sd/-(B. Govinda Rao) (Kumar Raghavan)
Asst. General Manager (Finance) Director
Place : HyderabadDate : 31-Mar-2009
Statement of Changes in Equityfor the year ended 31st March, 2009
145
NAM-India MDC (PTY) Ltd
(Nam Dollars)
For the year ended For the year ended31st March 2009 31st March 2008
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Income/(Loss) as per Income statement 2,132,301 (277,773)
Adjustments for :
Finance items - Interest & Gains in foreign exchange 2,189 205
Non-cash items - Depreciation (158) (158)
Operating Income/(Loss) before Finance items (2,130,270) (277,820)
Adjustments for :
Increase(-)/Decrease(+) in Receivables – –
Increase(+)/Decrease(-) in current Liabilities (2,143,289) 276,614
Net Cash Flow from Operating Activities (13,019) (1,207)
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets – –
Deletion on disposal of Fixed Assets 712 –
Net Cash flow from Investing Activities 712 –
C. CASH FLOW FROM FINANCING ACTIVITIES :
Long term loans – –
Finance Items - interest & Gains in foreign exchange 2,189 205
Increase in Share capital – –
Net cash flow from Financing Activities 2,189 205
NET INCREASE IN CASH AND CASH (10,118) (1,002)EQUIVALENTS (A + B + C)
Cash & Cash equivalents at the beginning of the year 10,118 11,120
Cash & Cash equivalents at the end of the year – 10,118
(10,118) (1,002)
Sd/- Sd/-(B. Govinda Rao) (Kumar Raghavan)
Asst. General Manager (Finance) Director
Place : HyderabadDate : 31-Mar-2009
Cash Flow Statement for the year ended 31st March, 2009
NAM-India MDC (PTY) Ltd
146
The significant accounting policies adopted in thepreparation of these financial statements are setout below and are consistent with those of theprevious year.
1. BASIS OF PREPARATION:
The financial statements are prepared on thehistorical cost basis and in compliance withInternational Financial Reporting Standards(IFRS) and interpretations of those standards,as adopted by International AccountingStandards Board (IASB) and the requirementsof Companies Act of Namibia.
The adoption of IFRS has not resulted inmaterial IFRS adjustments; accordingly noreconciliation has been prepared betweenamounts previously reported under NamibianGAAP and IFRS.
2. FIXED ASSETS:
Fixed Assets are stated at historical cost lessaccumulated depreciation.
3. DEPRECIATION:
Depreciat ion is charged on straight- l inemethod based on the l i fe of the assetsdetermined by technical assessment at thefollowing rates:
Vehicles - 16.67%, Other Assets - 8.33%,Communication Instruments - 33.33%.
3.1 Assets costing less than N$1000 eachare depreciated fully in the year of puttingto use.
3.2 Depreciat ion is charged on pro-ratamonthly basis on additions /disposals ofassets during the year taking the first dayof the month for acquisit ion /commissioning and the last day of themonth for disposals.
3.3 In respect of addit ions forming anintegral part of an exist ing asset,depreciat ion is charged over theremaining useful l ife of the asset. Incase the asset is already ful lydepreciated, such addit ions aredepreciated in full.
Significant Accounting Policies4. PRELIMINARY EXPENDITURE:
Preliminary Expenses are amortized, wherefuture economic benefits are certain, in fiveequal annual instalments from the year ofcommencement of commercial production.
5. FOREIGN CURRENCY TRANSACTIONS:
5.1 Transactions in Foreign Currency areaccounted for at the exchange ratesprevailing on the date of the transaction.
5.2 Current Assets and Current Liabilities inforeign currencies are translated at theclosing exchange rate on the date ofBalance sheet and gains / losses areadjusted in the Income Statement.
6. GENERAL:
Pre-paid Expenses
Expenses are accounted under prepaidexpenses only where the amounts relating tounexpired period exceed N$.10,000/- in eachcase.
Financial Instruments
Financial instruments carried on the Balancesheet include Cash and Bank balances, Pre-paid expenses, Loans and advances,Deposits and Borrowings. The part icularrecognition methods adopted are disclosed inthe relevant accounting pol icy statementassociated with each item.
Cash and Cash equivalents
For the purposes of cash flow statement,cash and cash equivalents comprise cash inhand, current accounts in bank.
Sd/- Sd/-(B. Govinda Rao) (Kumar Raghavan)
Asst. General Manager Director(Finance)
Place : HyderabadDate : 31-Mar-2009
147
NAM-India MDC (PTY) Ltd
(Nam Dollars)
Office Communi-Assets Vehicles Equipments cation Total
other Assets instruments
At 31 March 2009
Gross Block:
Opening Balance on 01-04-2008 – 2,323 867 3,190
Additions during the year – – – –
TOTAL – 2,323 867 3,190
Deductions/Adjustments – 2,323 867 3,190
Closing Balance on 31-03-2009 – – – –
Depreciation :
Opening Balance on 01-04-2008 – 1,454 866 2,320
Depreciation for the year – 158 – 158
TOTAL – 1,612 866 2,478
Deductions/Adjustments – 1,612 866 2,478
Closing Balance on 31-03-2009 – – – –
Net book amount: – – – –
At 31 March 2008
Gross Block:
Opening Balance on 01-04-2007 – 2,323 867 3,190
Additions during the year – – – –
TOTAL – 2,323 867 3,190
Deductions/Adjustments – – – –
Closing Balance on 31-03-2008 – 2,323 867 3,190
Depreciation :
Opening Balance on 01-04-2007 – 1,296 866 2,162
Depreciation for the year – 158 – 158
TOTAL – 1,454 866 2,320
Deductions/Adjustments – – – –
Closing Balance on 31-03-2008 – 1,454 866 2,320
Net book amount: – 869 1 870
Minor value Assets costing less than N$ 1,000/- each depreciated fully during the year amount to Nil(Previous year Nil)
SCHEDULE - 1 : FIXED ASSETS
Notes to Financial Statements1. Schedules to Financial Statements
NAM-India MDC (PTY) Ltd
148
SCHEDULE - 2 : CASH AND CASH EQUIVALENTS(Nam Dollars)
As at 31st As at 31stMarch, 2009 March, 2008
Cash and cheques on hand – –
Bank balances :
(a) with NEDBANK Namibia, Windhoek :
On current accounts - US Dollar Account 3,781 9,126
- Nam Dollar Account 1,041 992
TOTAL 4,822 10,118
Less : Amount transferred to Parent Company 4,822 –towards Loan Account – 10,118
TOTAL – 10,118
SCHEDULE - 3 : CURRENT LIABILITIES(Nam Dollars)
As at 31st As at 31stMarch, 2009 March, 2008
Interest free Unsecured Loan from parentcompany NMDC Limited India
Opening Balance 2,133,522 1,866,676
Additions during the year 385,972 266,846
2,519,494 2,133,522
Less : Bank Balance transferred USD A/c 3,781 –to Parent Co towards Loan A/c NAD A/c 1,041 –on winding up 4,822 –
TOTAL 2,514,672 2,133,522
Less : Interest free Unsecured Loan Amountwritten up as not payable 2,514,672 –
– 2,133,522
Outstanding Expenses:
– Creditors for Misc.expenses – 9,767
– Courier charges – –
– 9,767
TOTAL – 2,143,289
149
NAM-India MDC (PTY) Ltd
SCHEDULE - 4 : FINANCE ITEMS(Nam Dollars)
For the year ended For the year ended31st March, 2009 31st March, 2008
Interest on :
Current account - USD account 44 53
44 53
Others:
Gain in Exchange variation 2,145 151
TOTAL 2,189 205
SCHEDULE - 10 : OTHER EXPENSES(Nam Dollars)
For the year ended For the year ended31st March, 2009 31st March, 2008
Rent, Insurance, Rates & Taxes – –
Payment to Auditors:Taxation matters 11,409 –
Audit Fee 08-09 3,450 –
Audit Fee 07-08 – 6,843
Audit Fee 06-07 – 6,842
Deregistration charges 4,140 –
Secttl Admn Fee – 2,925
18,999 16,610
Loss on Adjustment of Assets 712 –on Winding up
Sundries:
Travelling & Conveyance – –
Postage, Telephone & Courier service etc. – –
Loss in Foreign Exchange 361,071 258,753
Misc Expenses 21 –
Bank charges 3,599 364,691 2,457 261,210
TOTAL 384,402 277,820
: DETAILED INFORMATION :1. Particulars of Directors’ Remuneration: (Nam Dollars)
For the year ended For the year ended31st March, 2009 31st March, 2008
Foreign Allowances paid to Director Nil Nil
---- –
NAM-India MDC (PTY) Ltd
150
2. SHARE CAPITAL:
There is no change in the ordinary share
capital at 31st March 2009, which stood at
3,967 shares of N$1/- each issued against the
initial expenditure incurred for the formation of
the company. All the shares are held by the
parent company, NMDC Limited.
3. UNSECURED LOANS:
During the year, the company received a sum
of US$3,200 as interest-free loan from the
holding company, NMDC Limited, (formerly
National Mineral Development Corporation
Limited), Hyderabad, India to meet
administrative expenditure in Namibia. The
cumulative balance of the loan at 31st Mar
2009 stood at US$ 265,529.36 (N$2,519,494),
(Previous year - US$ 262,329.36
(N$2,133,522)). As no revenue has been
generated by the company so far, the loan
amount has not been repaid. In view of the
decision of the holding company, the entire
amount of Loan has been written off in the
books of the parent company.
4. REVENUE:
All the expenses of the company during
the year were met out of the Interest-free
loan received during the year from the
holding company, viz., NMDC Limited,
Hyderabad, India and no revenue accrued to
the company.
5. INCOME STATEMENT:
During the year 2008-09, no activity was taken
up by the company. The current year's
expenses are confined to secretarial & audit
Notes to Financial Statements (Contd..)fee, bank charges etc incurred for
administrative purposes.
6. TAXATION:
No provision for income tax was made, as the
company did not have any income during the
year. In view of the decision by the parent
company to wind up the subsidiary, the
company has not calculated tax loss during
the year.
7. Other Notes:
Contingent Liabilities
There are no claims against the company,
which are not acknowledged as debts at 31
March 2009.
Financial Instruments
In the normal course of its operations, the
company is exposed to liquidity and foreign
exchange risk. The company manages these
risks as follows:
Foreign exchange risk:
The company does not hedge its exposure
to foreign currency risk. The exposure as at
31-March-2009 was US$265,130.90 (Previous
year US$ 261,207.22) at the exchange rate of
US$1 = N$9.48857 (Previous year =
N$8.13299).
Liquidity risk:
The company has minimized i ts r isk of
l iquidity by ensuring that it has adequate
financial support from the holding
company.
151
NAM-India MDC (PTY) LtdFair value:
The director is of the opinion that the carrying
value of financial instruments approximates
fair value.
Related party transactions
The company is controlled by NMDC Limited
(formerly National Mineral Development
Corporation Limited), having its registered
office at Hyderabad, India, which owns 100%
of the company's shares.
Outstanding balances arising from inter-
company transactions:
Payable to related parties: (refer to schedule
3 for outstanding balances).
Sd/- Sd/-(B. Govinda Rao) (Kumar Raghavan)
Asst. General Manager Director(Finance)
Place : HyderabadDate : 31-Mar-2009
NAM-India MDC (PTY) Ltd
152